Correlation Between Vallourec and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Vallourec and TotalEnergies 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 Vallourec and TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vallourec and TotalEnergies EP Gabon, you can compare the effects of market volatilities on Vallourec and TotalEnergies 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 Vallourec with a short position of TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vallourec and TotalEnergies.
Diversification Opportunities for Vallourec and TotalEnergies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vallourec and TotalEnergies is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vallourec and TotalEnergies EP Gabon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies EP Gabon and Vallourec 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 Vallourec are associated (or correlated) with TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies EP Gabon has no effect on the direction of Vallourec i.e., Vallourec and TotalEnergies go up and down completely randomly.
Pair Corralation between Vallourec and TotalEnergies
Assuming the 90 days horizon Vallourec is expected to generate 1.31 times more return on investment than TotalEnergies. However, Vallourec is 1.31 times more volatile than TotalEnergies EP Gabon. It trades about 0.07 of its potential returns per unit of risk. TotalEnergies EP Gabon is currently generating about 0.02 per unit of risk. If you would invest 1,045 in Vallourec on August 27, 2024 and sell it today you would earn a total of 614.00 from holding Vallourec or generate 58.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vallourec vs. TotalEnergies EP Gabon
Performance |
| Timeline |
| Vallourec |
| TotalEnergies EP Gabon |
Vallourec and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vallourec and TotalEnergies
The main advantage of trading using opposite Vallourec and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vallourec position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.| Vallourec vs. Alstom SA | Vallourec vs. Compagnie de Saint Gobain | Vallourec vs. Bouygues SA | Vallourec vs. Manitou BF SA |
| TotalEnergies vs. Etablissements Maurel et | TotalEnergies vs. Esso SAF | TotalEnergies vs. Mtropole Tlvision SA | TotalEnergies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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