Correlation Between Bank of Georgia Group PLC and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Bank of Georgia Group PLC and TotalEnergies 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 Bank of Georgia Group PLC and TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Georgia and TotalEnergies SE, you can compare the effects of market volatilities on Bank of Georgia Group PLC and TotalEnergies 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 Bank of Georgia Group PLC with a short position of TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Georgia Group PLC and TotalEnergies.
Diversification Opportunities for Bank of Georgia Group PLC and TotalEnergies
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and TotalEnergies is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Georgia and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE and Bank of Georgia Group PLC 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 Bank of Georgia are associated (or correlated) with TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of Bank of Georgia Group PLC i.e., Bank of Georgia Group PLC and TotalEnergies go up and down completely randomly.
Pair Corralation between Bank of Georgia Group PLC and TotalEnergies
Assuming the 90 days trading horizon Bank of Georgia is expected to generate 0.83 times more return on investment than TotalEnergies. However, Bank of Georgia is 1.21 times less risky than TotalEnergies. It trades about 0.13 of its potential returns per unit of risk. TotalEnergies SE is currently generating about 0.08 per unit of risk. If you would invest 466,500 in Bank of Georgia on December 3, 2024 and sell it today you would earn a total of 66,500 from holding Bank of Georgia or generate 14.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Georgia vs. TotalEnergies SE
Performance |
| Timeline |
| Bank of Georgia Group PLC |
| TotalEnergies SE |
Bank of Georgia Group PLC and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Georgia Group PLC and TotalEnergies
The main advantage of trading using opposite Bank of Georgia Group PLC and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Georgia Group PLC position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.| Bank of Georgia Group PLC vs. Various Eateries PLC | Bank of Georgia Group PLC vs. Orient Telecoms | Bank of Georgia Group PLC vs. Molson Coors Beverage | Bank of Georgia Group PLC vs. Darden Restaurants |
| TotalEnergies vs. Software Circle plc | TotalEnergies vs. Sealed Air Corp | TotalEnergies vs. Amedeo Air Four | TotalEnergies vs. BE Semiconductor Industries |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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