Correlation Between Compal Electronics and Gaztransport

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

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

Diversification Opportunities for Compal Electronics and Gaztransport

0.0

Correlation Coefficient

Compal Electronics  Gaztransport

Pay attention - limited upside

The 3 months correlation between Compal and Gaztransport is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR 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 Compal Electronics 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 Compal Electronics GDR 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 Compal Electronics i.e., Compal Electronics and Gaztransport go up and down completely randomly.

Pair Corralation between Compal Electronics and Gaztransport

If you would invest  310.00  in Compal Electronics GDR on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Compal Electronics GDR or generate 0.0% return on investment over 90 days.

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

Compal Electronics GDR  vs.  Gaztransport et Technigaz

Compal Electronics GDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compal Electronics GDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Compal Electronics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Gaztransport et Technigaz

Risk-Adjusted Performance

1 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaztransport et Technigaz are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Gaztransport is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Compal Electronics and Gaztransport

The main advantage of trading using opposite Compal Electronics and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics 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 Compal Electronics GDR 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.