Correlation Between TOTAL ENERGY and SEALED AIR

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

By analyzing existing cross correlation between TOTAL ENERGY SERVS and SEALED AIR , you can compare the effects of market volatilities on TOTAL ENERGY and SEALED AIR 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 TOTAL ENERGY with a short position of SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL ENERGY and SEALED AIR.

Diversification Opportunities for TOTAL ENERGY and SEALED AIR

0.28

Correlation Coefficient

TOTAL ENERGY  SEALED AIR

Modest diversification

The 3 months correlation between TOTAL and SEALED is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL ENERGY SERVS and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR and TOTAL ENERGY 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 TOTAL ENERGY SERVS are associated (or correlated) with SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of TOTAL ENERGY i.e., TOTAL ENERGY and SEALED AIR go up and down completely randomly.

Pair Corralation between TOTAL ENERGY and SEALED AIR

Assuming the 90 days horizon TOTAL ENERGY SERVS is expected to generate 1.47 times more return on investment than SEALED AIR. However, TOTAL ENERGY is 1.47 times more volatile than SEALED AIR . It trades about 0.16 of its potential returns per unit of risk. SEALED AIR is currently generating about 0.03 per unit of risk. If you would invest  627.00  in TOTAL ENERGY SERVS on October 25, 2024 and sell it today you would earn a total of  132.00  from holding TOTAL ENERGY SERVS or generate 21.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TOTAL ENERGY SERVS  vs.  SEALED AIR

TOTAL ENERGY SERVS

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TOTAL ENERGY SERVS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TOTAL ENERGY reported solid returns over the last few months and may actually be approaching a breakup point.

SEALED AIR

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SEALED AIR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SEALED AIR is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TOTAL ENERGY and SEALED AIR

The main advantage of trading using opposite TOTAL ENERGY and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL ENERGY position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.

The idea behind TOTAL ENERGY SERVS and SEALED AIR 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.