Correlation Between Gaztransport Technigaz and Tikehau Capital

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

Diversification Opportunities for Gaztransport Technigaz and Tikehau Capital

0.68

Correlation Coefficient

Gaztransport Technigaz  Tikehau Capital

Poor diversification

The 3 months correlation between Gaztransport and Tikehau is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SAS and Tikehau Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tikehau Capital 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 Tikehau Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tikehau Capital has no effect on the direction of Gaztransport Technigaz i.e., Gaztransport Technigaz and Tikehau Capital go up and down completely randomly.

Pair Corralation between Gaztransport Technigaz and Tikehau Capital

Assuming the 90 days trading horizon Gaztransport Technigaz SAS is expected to generate 2.14 times more return on investment than Tikehau Capital. However, Gaztransport Technigaz is 2.14 times more volatile than Tikehau Capital. It trades about 0.07 of its potential returns per unit of risk. Tikehau Capital is currently generating about 0.03 per unit of risk. If you would invest  13,216  in Gaztransport Technigaz SAS on December 5, 2024 and sell it today you would earn a total of  1,374  from holding Gaztransport Technigaz SAS or generate 10.4% return on investment over 90 days.

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

Gaztransport Technigaz SAS  vs.  Tikehau Capital

Gaztransport Technigaz

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SAS are ranked lower than 5 (%) 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 April 2025.

Tikehau Capital

Risk-Adjusted Performance

Weak

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

Pair Trading with Gaztransport Technigaz and Tikehau Capital

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

The idea behind Gaztransport Technigaz SAS and Tikehau Capital 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.