Correlation Between Neoen SA and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Neoen SA 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 Neoen SA and TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neoen SA and TotalEnergies SE, you can compare the effects of market volatilities on Neoen SA 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 Neoen SA with a short position of TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neoen SA and TotalEnergies.
Diversification Opportunities for Neoen SA and TotalEnergies
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Neoen and TotalEnergies is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Neoen SA and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 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 has no effect on the direction of Neoen SA i.e., Neoen SA and TotalEnergies go up and down completely randomly.
Pair Corralation between Neoen SA and TotalEnergies
Assuming the 90 days trading horizon Neoen SA is expected to generate 0.31 times more return on investment than TotalEnergies. However, Neoen SA is 3.2 times less risky than TotalEnergies. It trades about 0.1 of its potential returns per unit of risk. TotalEnergies SE is currently generating about -0.09 per unit of risk. If you would invest 3,768 in Neoen SA on September 1, 2024 and sell it today you would earn a total of 186.00 from holding Neoen SA or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neoen SA vs. TotalEnergies SE
Performance |
| Timeline |
| Neoen SA |
| TotalEnergies SE |
Neoen SA and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neoen SA and TotalEnergies
The main advantage of trading using opposite Neoen SA and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neoen SA 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.| Neoen SA vs. Voltalia SA | Neoen SA vs. Gaztransport Technigaz SAS | Neoen SA vs. Worldline SA | Neoen SA vs. Rubis SCA |
| TotalEnergies vs. Air Liquide SA | TotalEnergies vs. Engie SA | TotalEnergies vs. Sanofi SA | TotalEnergies vs. AXA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |