Correlation Between Avance Gas and GasLog Partners

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

By analyzing existing cross correlation between Avance Gas Holding and GasLog Partners LP, you can compare the effects of market volatilities on Avance Gas and GasLog Partners 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 Avance Gas with a short position of GasLog Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avance Gas and GasLog Partners.

Diversification Opportunities for Avance Gas and GasLog Partners

-0.52

Correlation Coefficient

Avance Gas  GasLog Partners

Excellent diversification

The 3 months correlation between Avance and GasLog is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Avance Gas Holding and GasLog Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GasLog Partners LP and Avance Gas 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 Avance Gas Holding are associated (or correlated) with GasLog Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GasLog Partners LP has no effect on the direction of Avance Gas i.e., Avance Gas and GasLog Partners go up and down completely randomly.

Pair Corralation between Avance Gas and GasLog Partners

Assuming the 90 days horizon Avance Gas Holding is expected to generate 11.83 times more return on investment than GasLog Partners. However, Avance Gas is 11.83 times more volatile than GasLog Partners LP. It trades about 0.05 of its potential returns per unit of risk. GasLog Partners LP is currently generating about 0.06 per unit of risk. If you would invest  544.00  in Avance Gas Holding on September 28, 2024 and sell it today you would earn a total of  178.00  from holding Avance Gas Holding or generate 32.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Avance Gas Holding  vs.  GasLog Partners LP

Avance Gas Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

GasLog Partners LP

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GasLog Partners LP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, GasLog Partners is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Avance Gas and GasLog Partners

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

The idea behind Avance Gas Holding and GasLog Partners LP 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.