Correlation Between Getlink SE and Transurban

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

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

Diversification Opportunities for Getlink SE and Transurban

-0.21

Correlation Coefficient

Getlink SE  Transurban

Very good diversification

The 3 months correlation between Getlink and Transurban is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Getlink SE and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group and Getlink SE 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 Getlink SE are associated (or correlated) with Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of Getlink SE i.e., Getlink SE and Transurban go up and down completely randomly.

Pair Corralation between Getlink SE and Transurban

Assuming the 90 days trading horizon Getlink SE is expected to generate 1.33 times more return on investment than Transurban. However, Getlink SE is 1.33 times more volatile than Transurban Group. It trades about 0.04 of its potential returns per unit of risk. Transurban Group is currently generating about 0.05 per unit of risk. If you would invest  1,521  in Getlink SE on December 3, 2024 and sell it today you would earn a total of  45.00  from holding Getlink SE or generate 2.96% return on investment over 90 days.

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

Getlink SE  vs.  Transurban Group

Getlink SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Getlink SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Getlink SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Transurban Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transurban Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Transurban is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Getlink SE and Transurban

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

The idea behind Getlink SE and Transurban Group 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.