Correlation Between MONGOLIAN MINING and Gaztransport Technigaz

Can any of the company-specific risk be diversified away by investing in both MONGOLIAN MINING and Gaztransport Technigaz 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 MONGOLIAN MINING and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MONGOLIAN MINING CRPREGS and Gaztransport Technigaz SA, you can compare the effects of market volatilities on MONGOLIAN MINING and Gaztransport Technigaz 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 MONGOLIAN MINING with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of MONGOLIAN MINING and Gaztransport Technigaz.

Diversification Opportunities for MONGOLIAN MINING and Gaztransport Technigaz

-0.44

Correlation Coefficient

MONGOLIAN MINING  Gaztransport Technigaz

Very good diversification

The 3 months correlation between MONGOLIAN and Gaztransport is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding MONGOLIAN MINING CRPREGS and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and MONGOLIAN MINING 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 MONGOLIAN MINING CRPREGS are associated (or correlated) with Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of MONGOLIAN MINING i.e., MONGOLIAN MINING and Gaztransport Technigaz go up and down completely randomly.

Pair Corralation between MONGOLIAN MINING and Gaztransport Technigaz

Assuming the 90 days trading horizon MONGOLIAN MINING CRPREGS is expected to under-perform the Gaztransport Technigaz. In addition to that, MONGOLIAN MINING is 1.38 times more volatile than Gaztransport Technigaz SA. It trades about -0.08 of its total potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.13 per unit of volatility. If you would invest  12,880  in Gaztransport Technigaz SA on October 26, 2024 and sell it today you would earn a total of  1,880  from holding Gaztransport Technigaz SA or generate 14.6% return on investment over 90 days.

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

MONGOLIAN MINING CRPREGS  vs.  Gaztransport Technigaz SA

MONGOLIAN MINING CRPREGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MONGOLIAN MINING CRPREGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Gaztransport Technigaz

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gaztransport Technigaz reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MONGOLIAN MINING and Gaztransport Technigaz

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

The idea behind MONGOLIAN MINING CRPREGS and Gaztransport Technigaz SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.