Correlation Between Groupe Pizzorno and Gaztransport Technigaz

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

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

Diversification Opportunities for Groupe Pizzorno and Gaztransport Technigaz

0.7

Correlation Coefficient

Groupe Pizzorno  Gaztransport Technigaz

Poor diversification

The 3 months correlation between Groupe and Gaztransport is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Pizzorno Environnement and Gaztransport Technigaz SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Groupe Pizzorno 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 Groupe Pizzorno Environnement are associated (or correlated) with Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Groupe Pizzorno i.e., Groupe Pizzorno and Gaztransport Technigaz go up and down completely randomly.

Pair Corralation between Groupe Pizzorno and Gaztransport Technigaz

Assuming the 90 days trading horizon Groupe Pizzorno is expected to generate 1.86 times less return on investment than Gaztransport Technigaz. In addition to that, Groupe Pizzorno is 1.0 times more volatile than Gaztransport Technigaz SAS. It trades about 0.03 of its total potential returns per unit of risk. Gaztransport Technigaz SAS is currently generating about 0.06 per unit of volatility. If you would invest  13,140  in Gaztransport Technigaz SAS on August 31, 2024 and sell it today you would earn a total of  630.00  from holding Gaztransport Technigaz SAS or generate 4.79% return on investment over 90 days.

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

Groupe Pizzorno Environnement  vs.  Gaztransport Technigaz SAS

Groupe Pizzorno Envi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Pizzorno Environnement are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Groupe Pizzorno is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gaztransport Technigaz

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SAS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Gaztransport Technigaz is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Groupe Pizzorno and Gaztransport Technigaz

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

The idea behind Groupe Pizzorno Environnement and Gaztransport Technigaz SAS 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 Global Correlations module to find global opportunities by holding instruments from different markets.