Correlation Between TotalEnergies and OMV AG
Can any of the company-specific risk be diversified away by investing in both TotalEnergies and OMV AG 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 OMV AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TotalEnergies SE ADR and OMV AG PK, you can compare the effects of market volatilities on TotalEnergies and OMV AG 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 OMV AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of TotalEnergies and OMV AG.
Diversification Opportunities for TotalEnergies and OMV AG
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TotalEnergies and OMV is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE ADR and OMV AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMV AG PK 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 ADR are associated (or correlated) with OMV AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMV AG PK has no effect on the direction of TotalEnergies i.e., TotalEnergies and OMV AG go up and down completely randomly.
Pair Corralation between TotalEnergies and OMV AG
Considering the 90-day investment horizon TotalEnergies SE ADR is expected to under-perform the OMV AG. In addition to that, TotalEnergies is 1.18 times more volatile than OMV AG PK. It trades about -0.39 of its total potential returns per unit of risk. OMV AG PK is currently generating about -0.05 per unit of volatility. If you would invest 1,039 in OMV AG PK on August 28, 2024 and sell it today you would lose (12.00) from holding OMV AG PK or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TotalEnergies SE ADR vs. OMV AG PK
Performance |
| Timeline |
| TotalEnergies SE ADR |
| OMV AG PK |
TotalEnergies and OMV AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TotalEnergies and OMV AG
The main advantage of trading using opposite TotalEnergies and OMV AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TotalEnergies position performs unexpectedly, OMV AG 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 OMV AG will offset losses from the drop in OMV AG's long position.| TotalEnergies vs. BP PLC ADR | TotalEnergies vs. Chevron Corp | TotalEnergies vs. Exxon Mobil Corp | TotalEnergies vs. Equinor ASA ADR |
| OMV AG vs. Equinor ASA ADR | OMV AG vs. TotalEnergies SE ADR | OMV AG vs. Ecopetrol SA ADR | OMV AG vs. National Fuel Gas |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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