Correlation Between Voltalia and Technip Energies
Can any of the company-specific risk be diversified away by investing in both Voltalia and Technip Energies 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 Voltalia and Technip Energies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voltalia SA and Technip Energies BV, you can compare the effects of market volatilities on Voltalia and Technip Energies 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 Voltalia with a short position of Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltalia and Technip Energies.
Diversification Opportunities for Voltalia and Technip Energies
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voltalia and Technip is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Voltalia SA and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and Voltalia 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 Voltalia SA are associated (or correlated) with Technip Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technip Energies has no effect on the direction of Voltalia i.e., Voltalia and Technip Energies go up and down completely randomly.
Pair Corralation between Voltalia and Technip Energies
Assuming the 90 days trading horizon Voltalia SA is expected to under-perform the Technip Energies. In addition to that, Voltalia is 1.94 times more volatile than Technip Energies BV. It trades about -0.08 of its total potential returns per unit of risk. Technip Energies BV is currently generating about -0.14 per unit of volatility. 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 |
Voltalia SA vs. Technip Energies BV
Performance |
| Timeline |
| Voltalia SA |
| Technip Energies |
Voltalia and Technip Energies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voltalia and Technip Energies
The main advantage of trading using opposite Voltalia and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voltalia position performs unexpectedly, Technip Energies 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 Technip Energies will offset losses from the drop in Technip Energies' long position.The idea behind Voltalia SA and Technip Energies BV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Stocks Directory module to find actively traded stocks across global markets.
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