Correlation Between Symphony Environmental and Gaztransport

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

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

Diversification Opportunities for Symphony Environmental and Gaztransport

-0.13

Correlation Coefficient

Symphony Environmental  Gaztransport

Good diversification

The 3 months correlation between Symphony and Gaztransport is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol 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 Symphony Environmental 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 Symphony Environmental Technologies 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 Symphony Environmental i.e., Symphony Environmental and Gaztransport go up and down completely randomly.

Pair Corralation between Symphony Environmental and Gaztransport

Assuming the 90 days trading horizon Symphony Environmental is expected to generate 1.08 times less return on investment than Gaztransport. But when comparing it to its historical volatility, Symphony Environmental Technologies is 1.01 times less risky than Gaztransport. It trades about 0.42 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest  12,740  in Gaztransport et Technigaz on October 22, 2024 and sell it today you would earn a total of  1,670  from holding Gaztransport et Technigaz or generate 13.11% return on investment over 90 days.

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

Symphony Environmental Technol  vs.  Gaztransport et Technigaz

Symphony Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Symphony Environmental is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gaztransport et Technigaz

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gaztransport unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Symphony Environmental and Gaztransport

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

The idea behind Symphony Environmental Technologies and Gaztransport et Technigaz 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.