Correlation Between Aramis SAS and Technip Energies
Can any of the company-specific risk be diversified away by investing in both Aramis SAS 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 Aramis SAS and Technip Energies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aramis SAS and Technip Energies BV, you can compare the effects of market volatilities on Aramis SAS 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 Aramis SAS with a short position of Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aramis SAS and Technip Energies.
Diversification Opportunities for Aramis SAS and Technip Energies
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aramis and Technip is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aramis SAS and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and Aramis SAS 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 Aramis SAS 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 Aramis SAS i.e., Aramis SAS and Technip Energies go up and down completely randomly.
Pair Corralation between Aramis SAS and Technip Energies
Assuming the 90 days trading horizon Aramis SAS is expected to generate 1.33 times more return on investment than Technip Energies. However, Aramis SAS is 1.33 times more volatile than Technip Energies BV. It trades about 0.42 of its potential returns per unit of risk. Technip Energies BV is currently generating about -0.14 per unit of risk. If you would invest 635.00 in Aramis SAS on September 12, 2024 and sell it today you would earn a total of 146.00 from holding Aramis SAS or generate 22.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aramis SAS vs. Technip Energies BV
Performance |
| Timeline |
| Aramis SAS |
| Technip Energies |
Aramis SAS and Technip Energies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aramis SAS and Technip Energies
The main advantage of trading using opposite Aramis SAS and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aramis SAS 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.| Aramis SAS vs. LVMH Mot Hennessy | Aramis SAS vs. LOreal SA | Aramis SAS vs. Hermes International SCA | Aramis SAS 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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