Correlation Between TotalEnergies and Inventiva
Can any of the company-specific risk be diversified away by investing in both TotalEnergies and Inventiva 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 TotalEnergies and Inventiva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TotalEnergies SE and Inventiva SA, you can compare the effects of market volatilities on TotalEnergies and Inventiva 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 TotalEnergies with a short position of Inventiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of TotalEnergies and Inventiva.
Diversification Opportunities for TotalEnergies and Inventiva
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TotalEnergies and Inventiva is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE and Inventiva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventiva SA and TotalEnergies 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 TotalEnergies SE are associated (or correlated) with Inventiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventiva SA has no effect on the direction of TotalEnergies i.e., TotalEnergies and Inventiva go up and down completely randomly.
Pair Corralation between TotalEnergies and Inventiva
Assuming the 90 days trading horizon TotalEnergies SE is expected to under-perform the Inventiva. But the stock apears to be less risky and, when comparing its historical volatility, TotalEnergies SE is 1.82 times less risky than Inventiva. The stock trades about -0.19 of its potential returns per unit of risk. The Inventiva SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 245.00 in Inventiva SA on August 25, 2024 and sell it today you would lose (1.00) from holding Inventiva SA or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TotalEnergies SE vs. Inventiva SA
Performance |
| Timeline |
| TotalEnergies SE |
| Inventiva SA |
TotalEnergies and Inventiva Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TotalEnergies and Inventiva
The main advantage of trading using opposite TotalEnergies and Inventiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TotalEnergies position performs unexpectedly, Inventiva 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 Inventiva will offset losses from the drop in Inventiva's long position.| TotalEnergies vs. Air Liquide SA | TotalEnergies vs. Engie SA | TotalEnergies vs. Sanofi SA | TotalEnergies vs. AXA SA |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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