Correlation Between Gaztransport Technigaz and Jacquet Metal

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

By analyzing existing cross correlation between Gaztransport Technigaz SAS and Jacquet Metal Service, you can compare the effects of market volatilities on Gaztransport Technigaz and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and Jacquet Metal.

Diversification Opportunities for Gaztransport Technigaz and Jacquet Metal

-0.27

Correlation Coefficient

Gaztransport Technigaz  Jacquet Metal

Very good diversification

The 3 months correlation between Gaztransport and Jacquet is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SAS and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 SAS are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Jacquet Metal go up and down completely randomly.

Pair Corralation between Gaztransport Technigaz and Jacquet Metal

Assuming the 90 days trading horizon Gaztransport Technigaz SAS is expected to generate 1.03 times more return on investment than Jacquet Metal. However, Gaztransport Technigaz is 1.03 times more volatile than Jacquet Metal Service. It trades about 0.05 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.02 per unit of risk. If you would invest  9,559  in Gaztransport Technigaz SAS on October 4, 2024 and sell it today you would earn a total of  3,891  from holding Gaztransport Technigaz SAS or generate 40.71% return on investment over 90 days.

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

Gaztransport Technigaz SAS  vs.  Jacquet Metal Service

Gaztransport Technigaz

Risk-Adjusted Performance

6 of 100

Modest

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

Jacquet Metal Service

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Jacquet Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gaztransport Technigaz and Jacquet Metal

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

The idea behind Gaztransport Technigaz SAS and Jacquet Metal Service 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .