Correlation Between Technip Energies and Hotel Majestic
Can any of the company-specific risk be diversified away by investing in both Technip Energies and Hotel Majestic 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 Hotel Majestic 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 Hotel Majestic Cannes, you can compare the effects of market volatilities on Technip Energies and Hotel Majestic 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 Hotel Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technip Energies and Hotel Majestic.
Diversification Opportunities for Technip Energies and Hotel Majestic
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Technip and Hotel is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and Hotel Majestic Cannes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Majestic Cannes 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 Hotel Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Majestic Cannes has no effect on the direction of Technip Energies i.e., Technip Energies and Hotel Majestic go up and down completely randomly.
Pair Corralation between Technip Energies and Hotel Majestic
Assuming the 90 days horizon Technip Energies BV is expected to generate 0.74 times more return on investment than Hotel Majestic. However, Technip Energies BV is 1.35 times less risky than Hotel Majestic. It trades about 0.05 of its potential returns per unit of risk. Hotel Majestic Cannes is currently generating about 0.04 per unit of risk. If you would invest 1,989 in Technip Energies BV on September 1, 2024 and sell it today you would earn a total of 337.00 from holding Technip Energies BV or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technip Energies BV vs. Hotel Majestic Cannes
Performance |
| Timeline |
| Technip Energies |
| Hotel Majestic Cannes |
Technip Energies and Hotel Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technip Energies and Hotel Majestic
The main advantage of trading using opposite Technip Energies and Hotel Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technip Energies position performs unexpectedly, Hotel Majestic 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 Hotel Majestic will offset losses from the drop in Hotel Majestic's long position.| Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
| Hotel Majestic vs. Eutelsat Communications SA | Hotel Majestic vs. Novatech Industries SA | Hotel Majestic vs. Axway Software | Hotel Majestic vs. Mauna Kea Technologies |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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