Correlation Between Technip Energies and OVH Groupe
Can any of the company-specific risk be diversified away by investing in both Technip Energies and OVH Groupe 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 OVH Groupe 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 OVH Groupe SAS, you can compare the effects of market volatilities on Technip Energies and OVH Groupe 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 OVH Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technip Energies and OVH Groupe.
Diversification Opportunities for Technip Energies and OVH Groupe
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Technip and OVH is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and OVH Groupe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVH Groupe SAS 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 OVH Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVH Groupe SAS has no effect on the direction of Technip Energies i.e., Technip Energies and OVH Groupe go up and down completely randomly.
Pair Corralation between Technip Energies and OVH Groupe
Assuming the 90 days horizon Technip Energies BV is expected to under-perform the OVH Groupe. In addition to that, Technip Energies is 1.75 times more volatile than OVH Groupe SAS. It trades about -0.14 of its total potential returns per unit of risk. OVH Groupe SAS is currently generating about -0.07 per unit of volatility. If you would invest 854.00 in OVH Groupe SAS on September 12, 2024 and sell it today you would lose (13.00) from holding OVH Groupe SAS or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technip Energies BV vs. OVH Groupe SAS
Performance |
| Timeline |
| Technip Energies |
| OVH Groupe SAS |
Technip Energies and OVH Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technip Energies and OVH Groupe
The main advantage of trading using opposite Technip Energies and OVH Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technip Energies position performs unexpectedly, OVH Groupe 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 OVH Groupe will offset losses from the drop in OVH Groupe's long position.| Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
| OVH Groupe vs. La Francaise Des | OVH Groupe vs. TotalEnergies SE | OVH Groupe vs. Worldline SA | OVH Groupe vs. Atos SE |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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