Correlation Between Mauna Kea and Technip Energies
Can any of the company-specific risk be diversified away by investing in both Mauna Kea and Technip Energies 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 Mauna Kea and Technip Energies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mauna Kea Technologies and Technip Energies BV, you can compare the effects of market volatilities on Mauna Kea and Technip Energies 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 Mauna Kea with a short position of Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauna Kea and Technip Energies.
Diversification Opportunities for Mauna Kea and Technip Energies
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mauna and Technip is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mauna Kea Technologies and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and Mauna Kea 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 Mauna Kea Technologies are associated (or correlated) with Technip Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technip Energies has no effect on the direction of Mauna Kea i.e., Mauna Kea and Technip Energies go up and down completely randomly.
Pair Corralation between Mauna Kea and Technip Energies
Assuming the 90 days trading horizon Mauna Kea Technologies is expected to under-perform the Technip Energies. In addition to that, Mauna Kea is 1.54 times more volatile than Technip Energies BV. It trades about -0.09 of its total potential returns per unit of risk. Technip Energies BV is currently generating about 0.04 per unit of volatility. If you would invest 1,815 in Technip Energies BV on August 31, 2024 and sell it today you would earn a total of 479.00 from holding Technip Energies BV or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Mauna Kea Technologies vs. Technip Energies BV
Performance |
| Timeline |
| Mauna Kea Technologies |
| Technip Energies |
Mauna Kea and Technip Energies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mauna Kea and Technip Energies
The main advantage of trading using opposite Mauna Kea and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauna Kea position performs unexpectedly, Technip Energies 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 Technip Energies will offset losses from the drop in Technip Energies' long position.| Mauna Kea vs. LVMH Mot Hennessy | Mauna Kea vs. LOreal SA | Mauna Kea vs. Hermes International SCA | Mauna Kea vs. Manitou BF SA |
| Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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