Correlation Between Gaztransport Technigaz and US Bancorp

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

Diversification Opportunities for Gaztransport Technigaz and US Bancorp

GaztransportUB5Diversified AwayGaztransportUB5Diversified Away100%
-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Gaztransport and UB5 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and US Bancorp go up and down completely randomly.

Pair Corralation between Gaztransport Technigaz and US Bancorp

Assuming the 90 days horizon Gaztransport Technigaz SA is expected to generate 1.4 times more return on investment than US Bancorp. However, Gaztransport Technigaz is 1.4 times more volatile than US Bancorp. It trades about 0.0 of its potential returns per unit of risk. US Bancorp is currently generating about -0.07 per unit of risk. If you would invest  13,746  in Gaztransport Technigaz SA on November 22, 2024 and sell it today you would lose (96.00) from holding Gaztransport Technigaz SA or give up 0.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.33%
ValuesDaily Returns

Gaztransport Technigaz SA  vs.  US Bancorp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.159TG UB5
       Timeline  
Gaztransport Technigaz 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Gaztransport Technigaz SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gaztransport Technigaz is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb130135140145150
US Bancorp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days US Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, US Bancorp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb454647484950

Gaztransport Technigaz and US Bancorp Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.97-4.47-2.97-1.470.01.472.994.56.027.54 0.050.100.150.20
JavaScript chart by amCharts 3.21.159TG UB5
       Returns  

Pair Trading with Gaztransport Technigaz and US Bancorp

The main advantage of trading using opposite Gaztransport Technigaz and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.
The idea behind Gaztransport Technigaz SA and US Bancorp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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