Correlation Between Fulcrum Metals and Gaztransport

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

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

Diversification Opportunities for Fulcrum Metals and Gaztransport

-0.75

Correlation Coefficient

Fulcrum Metals  Gaztransport

Pay attention - limited upside

The 3 months correlation between Fulcrum and Gaztransport is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Metals PLC 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 Fulcrum 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 Fulcrum Metals PLC 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 Fulcrum Metals i.e., Fulcrum Metals and Gaztransport go up and down completely randomly.

Pair Corralation between Fulcrum Metals and Gaztransport

Assuming the 90 days trading horizon Fulcrum Metals PLC is expected to under-perform the Gaztransport. In addition to that, Fulcrum Metals is 2.2 times more volatile than Gaztransport et Technigaz. It trades about -0.13 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.07 per unit of volatility. If you would invest  11,749  in Gaztransport et Technigaz on September 12, 2024 and sell it today you would earn a total of  1,551  from holding Gaztransport et Technigaz or generate 13.2% return on investment over 90 days.

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

Fulcrum Metals PLC  vs.  Gaztransport et Technigaz

Fulcrum Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulcrum Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Gaztransport et Technigaz

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Gaztransport is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fulcrum Metals and Gaztransport

The main advantage of trading using opposite Fulcrum Metals and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum 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 Fulcrum Metals PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.