Correlation Between Technip Energies and Voltalia
Can any of the company-specific risk be diversified away by investing in both Technip Energies and Voltalia 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 Voltalia 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 Voltalia SA, you can compare the effects of market volatilities on Technip Energies and Voltalia 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 Voltalia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technip Energies and Voltalia.
Diversification Opportunities for Technip Energies and Voltalia
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Technip and Voltalia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia SA 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 Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of Technip Energies i.e., Technip Energies and Voltalia go up and down completely randomly.
Pair Corralation between Technip Energies and Voltalia
Assuming the 90 days horizon Technip Energies BV is expected to generate 0.52 times more return on investment than Voltalia. However, Technip Energies BV is 1.94 times less risky than Voltalia. It trades about -0.14 of its potential returns per unit of risk. Voltalia SA is currently generating about -0.08 per unit of risk. If you would invest 2,546 in Technip Energies BV on September 12, 2024 and sell it today you would lose (138.00) from holding Technip Energies BV or give up 5.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technip Energies BV vs. Voltalia SA
Performance |
| Timeline |
| Technip Energies |
| Voltalia SA |
Technip Energies and Voltalia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technip Energies and Voltalia
The main advantage of trading using opposite Technip Energies and Voltalia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technip Energies position performs unexpectedly, Voltalia 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 Voltalia will offset losses from the drop in Voltalia's long position.| Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
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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