Correlation Between Cornish Metals and Gaztransport

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

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

Diversification Opportunities for Cornish Metals and Gaztransport

0.59

Correlation Coefficient

Cornish Metals  Gaztransport

Very weak diversification

The 3 months correlation between Cornish and Gaztransport is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and Cornish Metals 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 Cornish Metals are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Cornish Metals i.e., Cornish Metals and Gaztransport go up and down completely randomly.

Pair Corralation between Cornish Metals and Gaztransport

Assuming the 90 days trading horizon Cornish Metals is expected to generate 2.87 times more return on investment than Gaztransport. However, Cornish Metals is 2.87 times more volatile than Gaztransport et Technigaz. It trades about 0.16 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.08 per unit of risk. If you would invest  665.00  in Cornish Metals on September 17, 2024 and sell it today you would earn a total of  260.00  from holding Cornish Metals or generate 39.1% return on investment over 90 days.

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

Cornish Metals  vs.  Gaztransport et Technigaz

Cornish Metals

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cornish Metals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Cornish Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gaztransport et Technigaz

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gaztransport may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cornish Metals and Gaztransport

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

The idea behind Cornish Metals and Gaztransport et Technigaz 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.