Correlation Between CENTURIA OFFICE and TotalEnergies

Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE 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 CENTURIA OFFICE and TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CENTURIA OFFICE REIT and TotalEnergies SE, you can compare the effects of market volatilities on CENTURIA OFFICE 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 CENTURIA OFFICE with a short position of TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and TotalEnergies.

Diversification Opportunities for CENTURIA OFFICE and TotalEnergies

0.5

Correlation Coefficient

CENTURIA OFFICE  TotalEnergies

Very weak diversification

The 3 months correlation between CENTURIA and TotalEnergies is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE and CENTURIA OFFICE 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 CENTURIA OFFICE REIT 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 SE has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and TotalEnergies go up and down completely randomly.

Pair Corralation between CENTURIA OFFICE and TotalEnergies

Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 6.34 times less return on investment than TotalEnergies. In addition to that, CENTURIA OFFICE is 1.46 times more volatile than TotalEnergies SE. It trades about 0.01 of its total potential returns per unit of risk. TotalEnergies SE is currently generating about 0.1 per unit of volatility. If you would invest  5,270  in TotalEnergies SE on December 4, 2024 and sell it today you would earn a total of  430.00  from holding TotalEnergies SE or generate 8.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

CENTURIA OFFICE REIT  vs.  TotalEnergies SE

CENTURIA OFFICE REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days CENTURIA OFFICE REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CENTURIA OFFICE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

TotalEnergies SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TotalEnergies SE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, TotalEnergies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CENTURIA OFFICE and TotalEnergies

The main advantage of trading using opposite CENTURIA OFFICE and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE 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.

The idea behind CENTURIA OFFICE REIT and TotalEnergies SE 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.