Correlation Between Triad Group and Gaztransport

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

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

Diversification Opportunities for Triad Group and Gaztransport

0.69

Correlation Coefficient

Triad Group  Gaztransport

Poor diversification

The 3 months correlation between Triad and Gaztransport is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC 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 Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and Gaztransport go up and down completely randomly.

Pair Corralation between Triad Group and Gaztransport

Assuming the 90 days trading horizon Triad Group PLC is expected to generate 0.65 times more return on investment than Gaztransport. However, Triad Group PLC is 1.54 times less risky than Gaztransport. It trades about 0.43 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.11 per unit of risk. If you would invest  27,500  in Triad Group PLC on November 30, 2024 and sell it today you would earn a total of  12,000  from holding Triad Group PLC or generate 43.64% return on investment over 90 days.

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

Triad Group PLC  vs.  Gaztransport et Technigaz

Triad Group PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Triad Group PLC are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Triad Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gaztransport et Technigaz

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gaztransport unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Triad Group and Gaztransport

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

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.