Correlation Between Gaztransport Technigaz and BEBO Health

Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz and BEBO Health 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 BEBO Health 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 BEBO Health SA, you can compare the effects of market volatilities on Gaztransport Technigaz and BEBO Health 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 BEBO Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and BEBO Health.

Diversification Opportunities for Gaztransport Technigaz and BEBO Health

-0.35

Correlation Coefficient

Gaztransport Technigaz  BEBO Health

Very good diversification

The 3 months correlation between Gaztransport and BEBO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SAS and BEBO Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEBO Health SA 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 BEBO Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEBO Health SA has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and BEBO Health go up and down completely randomly.

Pair Corralation between Gaztransport Technigaz and BEBO Health

Assuming the 90 days trading horizon Gaztransport Technigaz SAS is expected to generate 0.55 times more return on investment than BEBO Health. However, Gaztransport Technigaz SAS is 1.82 times less risky than BEBO Health. It trades about 0.09 of its potential returns per unit of risk. BEBO Health SA is currently generating about -0.12 per unit of risk. If you would invest  12,351  in Gaztransport Technigaz SAS on September 12, 2024 and sell it today you would earn a total of  899.00  from holding Gaztransport Technigaz SAS or generate 7.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Gaztransport Technigaz SAS  vs.  BEBO Health SA

Gaztransport Technigaz

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SAS are ranked lower than 7 (%) 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 January 2025.

BEBO Health SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BEBO Health SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Gaztransport Technigaz and BEBO Health

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

The idea behind Gaztransport Technigaz SAS and BEBO Health SA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.