Correlation Between Gaztransport Technigaz and Accenture Plc

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

Diversification Opportunities for Gaztransport Technigaz and Accenture Plc

0.37

Correlation Coefficient

Gaztransport Technigaz  Accenture Plc

Weak diversification

The 3 months correlation between Gaztransport and Accenture is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Accenture Plc go up and down completely randomly.

Pair Corralation between Gaztransport Technigaz and Accenture Plc

Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 1.14 times more return on investment than Accenture Plc. However, Gaztransport Technigaz is 1.14 times more volatile than Accenture plc. It trades about 0.04 of its potential returns per unit of risk. Accenture plc is currently generating about 0.05 per unit of risk. If you would invest  9,480  in Gaztransport Technigaz SA on October 4, 2024 and sell it today you would earn a total of  3,500  from holding Gaztransport Technigaz SA or generate 36.92% return on investment over 90 days.

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

Gaztransport Technigaz SA  vs.  Accenture plc

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.

Accenture plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Accenture plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Accenture Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gaztransport Technigaz and Accenture Plc

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

The idea behind Gaztransport Technigaz SA and Accenture 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.