Correlation Between Technip Energies and Mauna Kea
Can any of the company-specific risk be diversified away by investing in both Technip Energies and Mauna Kea 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 Technip Energies and Mauna Kea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technip Energies BV and Mauna Kea Technologies, you can compare the effects of market volatilities on Technip Energies and Mauna Kea 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 Technip Energies with a short position of Mauna Kea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technip Energies and Mauna Kea.
Diversification Opportunities for Technip Energies and Mauna Kea
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Technip and Mauna is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and Mauna Kea Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mauna Kea Technologies and Technip Energies 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 Technip Energies BV are associated (or correlated) with Mauna Kea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mauna Kea Technologies has no effect on the direction of Technip Energies i.e., Technip Energies and Mauna Kea go up and down completely randomly.
Pair Corralation between Technip Energies and Mauna Kea
Assuming the 90 days horizon Technip Energies BV is expected to generate 0.65 times more return on investment than Mauna Kea. However, Technip Energies BV is 1.54 times less risky than Mauna Kea. It trades about 0.04 of its potential returns per unit of risk. Mauna Kea Technologies is currently generating about -0.09 per unit of risk. If you would invest 1,815 in Technip Energies BV on August 31, 2024 and sell it today you would earn a total of 479.00 from holding Technip Energies BV or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Technip Energies BV vs. Mauna Kea Technologies
Performance |
| Timeline |
| Technip Energies |
| Mauna Kea Technologies |
Technip Energies and Mauna Kea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technip Energies and Mauna Kea
The main advantage of trading using opposite Technip Energies and Mauna Kea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technip Energies position performs unexpectedly, Mauna Kea 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 Mauna Kea will offset losses from the drop in Mauna Kea's long position.| Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
| Mauna Kea vs. LVMH Mot Hennessy | Mauna Kea vs. LOreal SA | Mauna Kea vs. Hermes International SCA | Mauna Kea vs. Manitou BF 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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