Correlation Between TOTAL BANGUN and TOTAL GABON
Can any of the company-specific risk be diversified away by investing in both TOTAL BANGUN and TOTAL GABON 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 BANGUN and TOTAL GABON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL BANGUN PERSAD and TOTAL GABON, you can compare the effects of market volatilities on TOTAL BANGUN and TOTAL GABON 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 BANGUN with a short position of TOTAL GABON. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL BANGUN and TOTAL GABON.
Diversification Opportunities for TOTAL BANGUN and TOTAL GABON
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TOTAL and TOTAL is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL BANGUN PERSAD and TOTAL GABON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL GABON and TOTAL BANGUN 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 BANGUN PERSAD are associated (or correlated) with TOTAL GABON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL GABON has no effect on the direction of TOTAL BANGUN i.e., TOTAL BANGUN and TOTAL GABON go up and down completely randomly.
Pair Corralation between TOTAL BANGUN and TOTAL GABON
Assuming the 90 days trading horizon TOTAL BANGUN PERSAD is expected to generate 11.17 times more return on investment than TOTAL GABON. However, TOTAL BANGUN is 11.17 times more volatile than TOTAL GABON. It trades about 0.08 of its potential returns per unit of risk. TOTAL GABON is currently generating about 0.06 per unit of risk. If you would invest 1.00 in TOTAL BANGUN PERSAD on September 3, 2024 and sell it today you would earn a total of 2.20 from holding TOTAL BANGUN PERSAD or generate 220.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOTAL BANGUN PERSAD vs. TOTAL GABON
Performance |
| Timeline |
| TOTAL BANGUN PERSAD |
| TOTAL GABON |
TOTAL BANGUN and TOTAL GABON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL BANGUN and TOTAL GABON
The main advantage of trading using opposite TOTAL BANGUN and TOTAL GABON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL BANGUN position performs unexpectedly, TOTAL GABON 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 TOTAL GABON will offset losses from the drop in TOTAL GABON's long position.| TOTAL BANGUN vs. TOTAL GABON | TOTAL BANGUN vs. Walgreens Boots Alliance | TOTAL BANGUN vs. Peak Resources Limited |
| 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 |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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