Correlation Between Gaztransport and Brickability Group

Can any of the company-specific risk be diversified away by investing in both Gaztransport and Brickability Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gaztransport and Brickability Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gaztransport et Technigaz and Brickability Group Plc, you can compare the effects of market volatilities on Gaztransport and Brickability Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gaztransport with a short position of Brickability Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Brickability Group.

Diversification Opportunities for Gaztransport and Brickability Group

-0.08

Correlation Coefficient

Gaztransport  Brickability Group

Good diversification

The 3 months correlation between Gaztransport and Brickability is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Brickability Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickability Group Plc and Gaztransport is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gaztransport et Technigaz are associated (or correlated) with Brickability Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickability Group Plc has no effect on the direction of Gaztransport i.e., Gaztransport and Brickability Group go up and down completely randomly.

Pair Corralation between Gaztransport and Brickability Group

Assuming the 90 days trading horizon Gaztransport et Technigaz is expected to generate 0.82 times more return on investment than Brickability Group. However, Gaztransport et Technigaz is 1.23 times less risky than Brickability Group. It trades about 0.22 of its potential returns per unit of risk. Brickability Group Plc is currently generating about -0.24 per unit of risk. If you would invest  13,290  in Gaztransport et Technigaz on October 12, 2024 and sell it today you would earn a total of  880.00  from holding Gaztransport et Technigaz or generate 6.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gaztransport et Technigaz  vs.  Brickability Group Plc

Gaztransport et Technigaz

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gaztransport may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Brickability Group Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brickability Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Brickability Group is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gaztransport and Brickability Group

The main advantage of trading using opposite Gaztransport and Brickability Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Brickability Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Brickability Group will offset losses from the drop in Brickability Group's long position.

The idea behind Gaztransport et Technigaz and Brickability Group Plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.