Correlation Between SCOR SE and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both SCOR SE 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 SCOR SE and TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR SE and TotalEnergies SE, you can compare the effects of market volatilities on SCOR SE 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 SCOR SE with a short position of TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR SE and TotalEnergies.
Diversification Opportunities for SCOR SE and TotalEnergies
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SCOR and TotalEnergies is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SCOR SE and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE and SCOR SE 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 SCOR SE 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 SCOR SE i.e., SCOR SE and TotalEnergies go up and down completely randomly.
Pair Corralation between SCOR SE and TotalEnergies
Assuming the 90 days trading horizon SCOR SE is expected to generate 1.88 times more return on investment than TotalEnergies. However, SCOR SE is 1.88 times more volatile than TotalEnergies SE. It trades about 0.02 of its potential returns per unit of risk. TotalEnergies SE is currently generating about 0.02 per unit of risk. If you would invest 2,194 in SCOR SE on August 31, 2024 and sell it today you would earn a total of 162.00 from holding SCOR SE or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOR SE vs. TotalEnergies SE
Performance |
| Timeline |
| SCOR SE |
| TotalEnergies SE |
SCOR SE and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR SE and TotalEnergies
The main advantage of trading using opposite SCOR SE and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR SE 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.The idea behind SCOR SE and TotalEnergies SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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