Correlation Between Gaztransport and Falcon Oil

Can any of the company-specific risk be diversified away by investing in both Gaztransport and Falcon Oil 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 Falcon Oil 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 Falcon Oil Gas, you can compare the effects of market volatilities on Gaztransport and Falcon Oil 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 Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Falcon Oil.

Diversification Opportunities for Gaztransport and Falcon Oil

-0.56

Correlation Coefficient

Gaztransport  Falcon Oil

Excellent diversification

The 3 months correlation between Gaztransport and Falcon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Falcon Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Oil Gas 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 Falcon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Oil Gas has no effect on the direction of Gaztransport i.e., Gaztransport and Falcon Oil go up and down completely randomly.

Pair Corralation between Gaztransport and Falcon Oil

Assuming the 90 days trading horizon Gaztransport is expected to generate 2.25 times less return on investment than Falcon Oil. But when comparing it to its historical volatility, Gaztransport et Technigaz is 2.43 times less risky than Falcon Oil. It trades about 0.09 of its potential returns per unit of risk. Falcon Oil Gas is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  425.00  in Falcon Oil Gas on October 4, 2024 and sell it today you would earn a total of  20.00  from holding Falcon Oil Gas or generate 4.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Gaztransport et Technigaz  vs.  Falcon Oil Gas

Gaztransport et Technigaz

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Gaztransport is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Falcon Oil Gas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Falcon Oil Gas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Falcon Oil is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gaztransport and Falcon Oil

The main advantage of trading using opposite Gaztransport and Falcon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Falcon Oil 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 Falcon Oil will offset losses from the drop in Falcon Oil's long position.

The idea behind Gaztransport et Technigaz and Falcon Oil Gas 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..