Correlation Between Technip Energies and X Fab
Can any of the company-specific risk be diversified away by investing in both Technip Energies and X Fab 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 X Fab 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 X Fab Silicon, you can compare the effects of market volatilities on Technip Energies and X Fab 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 X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technip Energies and X Fab.
Diversification Opportunities for Technip Energies and X Fab
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Technip and XFAB is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Technip Energies i.e., Technip Energies and X Fab go up and down completely randomly.
Pair Corralation between Technip Energies and X Fab
Assuming the 90 days horizon Technip Energies BV is expected to generate 0.79 times more return on investment than X Fab. However, Technip Energies BV is 1.27 times less risky than X Fab. It trades about 0.05 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.09 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Technip Energies BV vs. X Fab Silicon
Performance |
| Timeline |
| Technip Energies |
| X Fab Silicon |
Technip Energies and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technip Energies and X Fab
The main advantage of trading using opposite Technip Energies and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technip Energies position performs unexpectedly, X Fab 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 X Fab will offset losses from the drop in X Fab's long position.| Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
| X Fab vs. Chargeurs SA | X Fab vs. Straumann Holding AG | X Fab vs. Manitou BF SA | X Fab vs. Amundi Index Solutions |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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