Correlation Between OVH Groupe and Technip Energies
Can any of the company-specific risk be diversified away by investing in both OVH Groupe 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 OVH Groupe and Technip Energies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OVH Groupe SAS and Technip Energies BV, you can compare the effects of market volatilities on OVH Groupe 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 OVH Groupe with a short position of Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of OVH Groupe and Technip Energies.
Diversification Opportunities for OVH Groupe and Technip Energies
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OVH and Technip is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding OVH Groupe SAS and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and OVH Groupe 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 OVH Groupe SAS 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 OVH Groupe i.e., OVH Groupe and Technip Energies go up and down completely randomly.
Pair Corralation between OVH Groupe and Technip Energies
Assuming the 90 days trading horizon OVH Groupe SAS is expected to generate 0.57 times more return on investment than Technip Energies. However, OVH Groupe SAS is 1.75 times less risky than Technip Energies. It trades about -0.07 of its potential returns per unit of risk. Technip Energies BV is currently generating about -0.14 per unit of risk. If you would invest 854.00 in OVH Groupe SAS on September 12, 2024 and sell it today you would lose (13.00) from holding OVH Groupe SAS or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OVH Groupe SAS vs. Technip Energies BV
Performance |
| Timeline |
| OVH Groupe SAS |
| Technip Energies |
OVH Groupe and Technip Energies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OVH Groupe and Technip Energies
The main advantage of trading using opposite OVH Groupe and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OVH Groupe 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.| OVH Groupe vs. La Francaise Des | OVH Groupe vs. TotalEnergies SE | OVH Groupe vs. Worldline SA | OVH Groupe vs. Atos SE |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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