Correlation Between Energy Transfer and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Energy Transfer 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 Energy Transfer and TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Transfer LP and TotalEnergies SE ADR, you can compare the effects of market volatilities on Energy Transfer 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 Energy Transfer with a short position of TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Transfer and TotalEnergies.
Diversification Opportunities for Energy Transfer and TotalEnergies
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energy and TotalEnergies is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Energy Transfer LP 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 Energy Transfer 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 Energy Transfer LP 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 Energy Transfer i.e., Energy Transfer and TotalEnergies go up and down completely randomly.
Pair Corralation between Energy Transfer and TotalEnergies
Allowing for the 90-day total investment horizon Energy Transfer LP is expected to generate 0.79 times more return on investment than TotalEnergies. However, Energy Transfer LP is 1.26 times less risky than TotalEnergies. It trades about 0.14 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 958.00 in Energy Transfer LP on August 30, 2024 and sell it today you would earn a total of 984.00 from holding Energy Transfer LP or generate 102.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Transfer LP vs. TotalEnergies SE ADR
Performance |
| Timeline |
| Energy Transfer LP |
| TotalEnergies SE ADR |
Energy Transfer and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Transfer and TotalEnergies
The main advantage of trading using opposite Energy Transfer and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Transfer 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.| Energy Transfer vs. Kinder Morgan | Energy Transfer vs. MPLX LP | Energy Transfer vs. Enbridge | Energy Transfer vs. Enterprise Products Partners |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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