Correlation Between China Gas and Snam Rete

By analyzing existing cross correlation between China Gas Hlds and Snam Rete Gas, you can compare the effects of market volatilities on China Gas and Snam Rete 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 China Gas with a short position of Snam Rete. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Gas and Snam Rete.

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

Diversification Opportunities for China Gas and Snam Rete

0.0
  Correlation Coefficient
China Gas Hlds
Snam Rete Gas

Pay attention - limited upside

The 3 months correlation between China and SNMRY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Gas Hlds and Snam Rete Gas in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Snam Rete Gas and China Gas 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 China Gas Hlds are associated (or correlated) with Snam Rete. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snam Rete Gas has no effect on the direction of China Gas i.e., China Gas and Snam Rete go up and down completely randomly.

Pair Corralation between China Gas and Snam Rete

If you would invest  0.00  in Snam Rete Gas on May 1, 2021 and sell it today you would earn a total of  0.00  from holding Snam Rete Gas or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

China Gas Hlds  vs.  Snam Rete Gas

 Performance (%) 
      Timeline 
China Gas Hlds 
 China Performance
0 of 100
Over the last 90 days China Gas Hlds has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, China Gas is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Snam Rete Gas 
 SNMRY Performance
0 of 100
Over the last 90 days Snam Rete Gas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Snam Rete is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

China Gas and Snam Rete Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with China Gas and Snam Rete

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

China Gas Hlds

Pair trading matchups for China Gas

Facebook vs. China Gas
Advance Auto vs. China Gas
Kerry Logistics vs. China Gas
Vmware vs. China Gas
Xinjiang Goldwind vs. China Gas
China Power vs. China Gas
Gilead Sciences vs. China Gas
Ford vs. China Gas
Microsoft Corp vs. China Gas
China Molybdenum vs. China Gas
Twitter vs. China Gas
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against China Gas as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. China Gas' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, China Gas' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to China Gas Hlds.
The idea behind China Gas Hlds and Snam Rete Gas 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.

Snam Rete Gas

Pair trading matchups for Snam Rete

Salesforce vs. Snam Rete
Facebook vs. Snam Rete
Vmware vs. Snam Rete
China Power vs. Snam Rete
Equinix vs. Snam Rete
Aspen Technology vs. Snam Rete
Kerry Logistics vs. Snam Rete
Gilead Sciences vs. Snam Rete
Ford vs. Snam Rete
Eagle MLP vs. Snam Rete
Advance Auto vs. Snam Rete
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Snam Rete as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Snam Rete's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Snam Rete's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Snam Rete Gas.
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 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.

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