Correlation Between Hotel Majestic and Technip Energies
Can any of the company-specific risk be diversified away by investing in both Hotel Majestic 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 Hotel Majestic and Technip Energies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Majestic Cannes and Technip Energies BV, you can compare the effects of market volatilities on Hotel Majestic 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 Hotel Majestic with a short position of Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Majestic and Technip Energies.
Diversification Opportunities for Hotel Majestic and Technip Energies
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hotel and Technip is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Majestic Cannes and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and Hotel Majestic 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 Hotel Majestic Cannes 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 Hotel Majestic i.e., Hotel Majestic and Technip Energies go up and down completely randomly.
Pair Corralation between Hotel Majestic and Technip Energies
Assuming the 90 days trading horizon Hotel Majestic is expected to generate 1.04 times less return on investment than Technip Energies. In addition to that, Hotel Majestic is 1.35 times more volatile than Technip Energies BV. It trades about 0.04 of its total potential returns per unit of risk. Technip Energies BV is currently generating about 0.05 per unit of volatility. If you would invest 1,989 in Technip Energies BV on September 1, 2024 and sell it today you would earn a total of 337.00 from holding Technip Energies BV or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Majestic Cannes vs. Technip Energies BV
Performance |
| Timeline |
| Hotel Majestic Cannes |
| Technip Energies |
Hotel Majestic and Technip Energies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Majestic and Technip Energies
The main advantage of trading using opposite Hotel Majestic and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Majestic 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.| Hotel Majestic vs. Eutelsat Communications SA | Hotel Majestic vs. Novatech Industries SA | Hotel Majestic vs. Axway Software | Hotel Majestic vs. Mauna Kea Technologies |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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