Correlation Between Roebuck Food and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Roebuck Food and Gaztransport 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 Roebuck Food and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and Gaztransport et Technigaz, you can compare the effects of market volatilities on Roebuck Food and Gaztransport 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 Roebuck Food with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Gaztransport.
Diversification Opportunities for Roebuck Food and Gaztransport
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Roebuck and Gaztransport is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and Roebuck Food 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 Roebuck Food Group are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Roebuck Food i.e., Roebuck Food and Gaztransport go up and down completely randomly.
Pair Corralation between Roebuck Food and Gaztransport
Assuming the 90 days trading horizon Roebuck Food is expected to generate 3.08 times less return on investment than Gaztransport. But when comparing it to its historical volatility, Roebuck Food Group is 1.79 times less risky than Gaztransport. It trades about 0.27 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 12,740 in Gaztransport et Technigaz on October 23, 2024 and sell it today you would earn a total of 1,700 from holding Gaztransport et Technigaz or generate 13.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Roebuck Food Group vs. Gaztransport et Technigaz
Performance |
Timeline |
Roebuck Food Group |
Gaztransport et Technigaz |
Roebuck Food and Gaztransport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Roebuck Food and Gaztransport
The main advantage of trading using opposite Roebuck Food and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food position performs unexpectedly, Gaztransport 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 will offset losses from the drop in Gaztransport's long position.Roebuck Food vs. Ondine Biomedical | Roebuck Food vs. Europa Metals | Roebuck Food vs. Revolution Beauty Group | Roebuck Food vs. PCI PAL PLC |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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