Correlation Between TotalEnergies and Compagnie
Can any of the company-specific risk be diversified away by investing in both TotalEnergies and Compagnie 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 TotalEnergies and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TotalEnergies EP Gabon and Compagnie de Saint Gobain, you can compare the effects of market volatilities on TotalEnergies and Compagnie 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 TotalEnergies with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of TotalEnergies and Compagnie.
Diversification Opportunities for TotalEnergies and Compagnie
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TotalEnergies and Compagnie is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies EP Gabon and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint and TotalEnergies 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 TotalEnergies EP Gabon are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of TotalEnergies i.e., TotalEnergies and Compagnie go up and down completely randomly.
Pair Corralation between TotalEnergies and Compagnie
Assuming the 90 days horizon TotalEnergies EP Gabon is expected to under-perform the Compagnie. But the stock apears to be less risky and, when comparing its historical volatility, TotalEnergies EP Gabon is 2.72 times less risky than Compagnie. The stock trades about -0.13 of its potential returns per unit of risk. The Compagnie de Saint Gobain is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 8,188 in Compagnie de Saint Gobain on August 24, 2024 and sell it today you would earn a total of 602.00 from holding Compagnie de Saint Gobain or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TotalEnergies EP Gabon vs. Compagnie de Saint Gobain
Performance |
| Timeline |
| TotalEnergies EP Gabon |
| Compagnie de Saint |
TotalEnergies and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TotalEnergies and Compagnie
The main advantage of trading using opposite TotalEnergies and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TotalEnergies position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.| TotalEnergies vs. Vallourec | TotalEnergies vs. Eramet SA | TotalEnergies vs. Soitec SA | TotalEnergies vs. Nexans SA |
| Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |