Correlation Between Gaztransport Technigaz and Hawesko Holding

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

Diversification Opportunities for Gaztransport Technigaz and Hawesko Holding

-0.67

Correlation Coefficient

Gaztransport Technigaz  Hawesko Holding

Excellent diversification

The 3 months correlation between Gaztransport and Hawesko is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Hawesko Holding go up and down completely randomly.

Pair Corralation between Gaztransport Technigaz and Hawesko Holding

Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 2.2 times less return on investment than Hawesko Holding. But when comparing it to its historical volatility, Gaztransport Technigaz SA is 1.86 times less risky than Hawesko Holding. It trades about 0.08 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,350  in Hawesko Holding AG on October 6, 2024 and sell it today you would earn a total of  280.00  from holding Hawesko Holding AG or generate 11.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

Gaztransport Technigaz SA  vs.  Hawesko Holding AG

Gaztransport Technigaz

Risk-Adjusted Performance

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Gaztransport Technigaz may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hawesko Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawesko Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hawesko Holding is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gaztransport Technigaz and Hawesko Holding

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

The idea behind Gaztransport Technigaz SA and Hawesko Holding AG 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.