Correlation Between Guandao Puer and Gaztransport Technigaz

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

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

Diversification Opportunities for Guandao Puer and Gaztransport Technigaz

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Correlation Coefficient

Guandao Puer  Gaztransport Technigaz

Pay attention - limited upside

The 3 months correlation between Guandao and Gaztransport is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guandao Puer Investment and Gaztransport Technigaz SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Guandao Puer 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 Guandao Puer Investment 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 Guandao Puer i.e., Guandao Puer and Gaztransport Technigaz go up and down completely randomly.

Pair Corralation between Guandao Puer and Gaztransport Technigaz

If you would invest  12,535  in Gaztransport Technigaz SAS on September 14, 2024 and sell it today you would earn a total of  805.00  from holding Gaztransport Technigaz SAS or generate 6.42% return on investment over 90 days.

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

Guandao Puer Investment  vs.  Gaztransport Technigaz SAS

Guandao Puer Investment

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Guandao Puer Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Guandao Puer is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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 January 2025.

Pair Trading with Guandao Puer and Gaztransport Technigaz

The main advantage of trading using opposite Guandao Puer and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guandao Puer 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 Guandao Puer Investment 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.