Correlation Between Global Gas and Cabot

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

By analyzing existing cross correlation between Global Gas and Cabot, you can compare the effects of market volatilities on Global Gas and Cabot 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 Global Gas with a short position of Cabot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gas and Cabot.

Diversification Opportunities for Global Gas and Cabot

0.0

Correlation Coefficient

Global Gas  Cabot

Pay attention - limited upside

The 3 months correlation between Global and Cabot is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Gas and Cabot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot and Global Gas 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 Global Gas are associated (or correlated) with Cabot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot has no effect on the direction of Global Gas i.e., Global Gas and Cabot go up and down completely randomly.

Pair Corralation between Global Gas and Cabot

If you would invest (100.00) in Global Gas on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Global Gas or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Global Gas  vs.  Cabot

Global Gas

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Gas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Global Gas is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cabot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cabot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Global Gas and Cabot

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

The idea behind Global Gas and Cabot 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.