Correlation Between Neoen SA and Technip Energies
Can any of the company-specific risk be diversified away by investing in both Neoen SA 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 Neoen SA and Technip Energies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neoen SA and Technip Energies BV, you can compare the effects of market volatilities on Neoen SA 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 Neoen SA with a short position of Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neoen SA and Technip Energies.
Diversification Opportunities for Neoen SA and Technip Energies
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Neoen and Technip is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Neoen SA and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and Neoen SA 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 Neoen SA 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 Neoen SA i.e., Neoen SA and Technip Energies go up and down completely randomly.
Pair Corralation between Neoen SA and Technip Energies
Assuming the 90 days trading horizon Neoen SA is expected to generate 18.88 times less return on investment than Technip Energies. But when comparing it to its historical volatility, Neoen SA is 7.63 times less risky than Technip Energies. It trades about 0.14 of its potential returns per unit of risk. Technip Energies BV is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,520 in Technip Energies BV on October 23, 2024 and sell it today you would earn a total of 262.00 from holding Technip Energies BV or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Neoen SA vs. Technip Energies BV
Performance |
| Timeline |
| Neoen SA |
| Technip Energies |
Neoen SA and Technip Energies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neoen SA and Technip Energies
The main advantage of trading using opposite Neoen SA and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neoen SA 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.| Neoen SA vs. Voltalia SA | Neoen SA vs. Gaztransport Technigaz SAS | Neoen SA vs. Worldline SA | Neoen SA vs. Rubis SCA |
| Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
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.
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