Correlation Between Rubis SCA and Gaztransport Technigaz

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

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

Diversification Opportunities for Rubis SCA and Gaztransport Technigaz

-0.38

Correlation Coefficient

Rubis SCA  Gaztransport Technigaz

Very good diversification

The 3 months correlation between Rubis and Gaztransport is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Rubis SCA and Gaztransport Technigaz SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and Rubis SCA 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 Rubis SCA 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 Rubis SCA i.e., Rubis SCA and Gaztransport Technigaz go up and down completely randomly.

Pair Corralation between Rubis SCA and Gaztransport Technigaz

Assuming the 90 days trading horizon Rubis SCA is expected to under-perform the Gaztransport Technigaz. In addition to that, Rubis SCA is 1.94 times more volatile than Gaztransport Technigaz SAS. It trades about -0.12 of its total potential returns per unit of risk. Gaztransport Technigaz SAS is currently generating about 0.06 per unit of volatility. If you would invest  13,330  in Gaztransport Technigaz SAS on August 30, 2024 and sell it today you would earn a total of  620.00  from holding Gaztransport Technigaz SAS or generate 4.65% return on investment over 90 days.

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

Rubis SCA  vs.  Gaztransport Technigaz SAS

Rubis SCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubis SCA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Gaztransport Technigaz

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport Technigaz SAS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Gaztransport Technigaz is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rubis SCA and Gaztransport Technigaz

The main advantage of trading using opposite Rubis SCA and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubis SCA 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 Rubis SCA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..