Correlation Between Crown LNG and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Crown LNG 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 Crown LNG and TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown LNG Holdings and TotalEnergies SE ADR, you can compare the effects of market volatilities on Crown LNG 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 Crown LNG with a short position of TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown LNG and TotalEnergies.
Diversification Opportunities for Crown LNG and TotalEnergies
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Crown and TotalEnergies is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Crown LNG Holdings and TotalEnergies SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE ADR and Crown LNG 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 Crown LNG Holdings 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 ADR has no effect on the direction of Crown LNG i.e., Crown LNG and TotalEnergies go up and down completely randomly.
Pair Corralation between Crown LNG and TotalEnergies
Assuming the 90 days horizon Crown LNG Holdings is expected to generate 26.67 times more return on investment than TotalEnergies. However, Crown LNG is 26.67 times more volatile than TotalEnergies SE ADR. It trades about 0.11 of its potential returns per unit of risk. TotalEnergies SE ADR is currently generating about 0.02 per unit of risk. If you would invest 3.75 in Crown LNG Holdings on August 30, 2024 and sell it today you would lose (0.26) from holding Crown LNG Holdings or give up 6.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 20.4% |
| Values | Daily Returns |
Crown LNG Holdings vs. TotalEnergies SE ADR
Performance |
| Timeline |
| Crown LNG Holdings |
| TotalEnergies SE ADR |
Crown LNG and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown LNG and TotalEnergies
The main advantage of trading using opposite Crown LNG and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown LNG 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.| Crown LNG vs. Fluent Inc | Crown LNG vs. National CineMedia | Crown LNG vs. Northstar Clean Technologies | Crown LNG vs. Deluxe |
| TotalEnergies vs. Chevron Corp | TotalEnergies vs. Merck Company | TotalEnergies vs. Pharvaris BV | TotalEnergies vs. Brinker International |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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