Correlation Between Gaztransport and Panther Metals

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

Diversification Opportunities for Gaztransport and Panther Metals

0.8

Correlation Coefficient

Gaztransport  Panther Metals

Very poor diversification

The 3 months correlation between Gaztransport and Panther is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals 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 Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Gaztransport i.e., Gaztransport and Panther Metals go up and down completely randomly.

Pair Corralation between Gaztransport and Panther Metals

Assuming the 90 days trading horizon Gaztransport is expected to generate 65.17 times less return on investment than Panther Metals. But when comparing it to its historical volatility, Gaztransport et Technigaz is 47.56 times less risky than Panther Metals. It trades about 0.05 of its potential returns per unit of risk. Panther Metals PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  12,250  in Panther Metals PLC on October 5, 2024 and sell it today you would lose (3,750) from holding Panther Metals PLC or give up 30.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.2%
Values	Daily Returns

Gaztransport et Technigaz  vs.  Panther Metals PLC

Gaztransport et Technigaz

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 6 (%) 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.

Panther Metals PLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Panther Metals PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Panther Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gaztransport and Panther Metals

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

The idea behind Gaztransport et Technigaz and Panther Metals 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.