Correlation Between TOTAL GABON and BROADWIND ENRGY
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON and BROADWIND ENRGY 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 TOTAL GABON and BROADWIND ENRGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and BROADWIND ENRGY, you can compare the effects of market volatilities on TOTAL GABON and BROADWIND ENRGY 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 TOTAL GABON with a short position of BROADWIND ENRGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and BROADWIND ENRGY.
Diversification Opportunities for TOTAL GABON and BROADWIND ENRGY
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between TOTAL and BROADWIND is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON and BROADWIND ENRGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADWIND ENRGY and TOTAL GABON 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 TOTAL GABON are associated (or correlated) with BROADWIND ENRGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADWIND ENRGY has no effect on the direction of TOTAL GABON i.e., TOTAL GABON and BROADWIND ENRGY go up and down completely randomly.
Pair Corralation between TOTAL GABON and BROADWIND ENRGY
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 0.89 times more return on investment than BROADWIND ENRGY. However, TOTAL GABON is 1.12 times less risky than BROADWIND ENRGY. It trades about 0.19 of its potential returns per unit of risk. BROADWIND ENRGY is currently generating about -0.08 per unit of risk. If you would invest 15,800 in TOTAL GABON on September 3, 2024 and sell it today you would earn a total of 2,600 from holding TOTAL GABON or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOTAL GABON vs. BROADWIND ENRGY
Performance |
| Timeline |
| TOTAL GABON |
| BROADWIND ENRGY |
TOTAL GABON and BROADWIND ENRGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and BROADWIND ENRGY
The main advantage of trading using opposite TOTAL GABON and BROADWIND ENRGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON position performs unexpectedly, BROADWIND ENRGY 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 BROADWIND ENRGY will offset losses from the drop in BROADWIND ENRGY's long position.| TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL BANGUN PERSAD | TOTAL GABON vs. TOTAL ENERGY SERVS | TOTAL GABON vs. Anheuser Busch InBev SANV |
| BROADWIND ENRGY vs. TOTAL GABON | BROADWIND ENRGY vs. Walgreens Boots Alliance | BROADWIND ENRGY vs. Peak Resources Limited |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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