Correlation Between Gaztransport Technigaz and SYSTEMAIR

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

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

Diversification Opportunities for Gaztransport Technigaz and SYSTEMAIR

0.1

Correlation Coefficient

Gaztransport Technigaz  SYSTEMAIR

Average diversification

The 3 months correlation between Gaztransport and SYSTEMAIR is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB and Gaztransport Technigaz 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 Technigaz SA are associated (or correlated) with SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and SYSTEMAIR go up and down completely randomly.

Pair Corralation between Gaztransport Technigaz and SYSTEMAIR

Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 1.9 times less return on investment than SYSTEMAIR. But when comparing it to its historical volatility, Gaztransport Technigaz SA is 1.89 times less risky than SYSTEMAIR. It trades about 0.06 of its potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  420.00  in SYSTEMAIR AB on October 4, 2024 and sell it today you would earn a total of  355.00  from holding SYSTEMAIR AB or generate 84.52% return on investment over 90 days.

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

Gaztransport Technigaz SA  vs.  SYSTEMAIR AB

Gaztransport Technigaz

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gaztransport Technigaz is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SYSTEMAIR AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SYSTEMAIR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gaztransport Technigaz and SYSTEMAIR

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

The idea behind Gaztransport Technigaz SA and SYSTEMAIR AB 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.

Check out your portfolio center.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.