Correlation Between Accent Resources and TotalEnergies

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

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

Diversification Opportunities for Accent Resources and TotalEnergies

-0.72

Correlation Coefficient

Accent Resources  TotalEnergies

Pay attention - limited upside

The 3 months correlation between Accent and TotalEnergies is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Accent Resources NL and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE and Accent Resources 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 Accent Resources NL 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 Accent Resources i.e., Accent Resources and TotalEnergies go up and down completely randomly.

Pair Corralation between Accent Resources and TotalEnergies

Assuming the 90 days horizon Accent Resources NL is expected to generate 6.74 times more return on investment than TotalEnergies. However, Accent Resources is 6.74 times more volatile than TotalEnergies SE. It trades about 0.11 of its potential returns per unit of risk. TotalEnergies SE is currently generating about -0.12 per unit of risk. If you would invest  1.10  in Accent Resources NL on September 16, 2024 and sell it today you would earn a total of  0.65  from holding Accent Resources NL or generate 59.09% return on investment over 90 days.

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

Accent Resources NL  vs.  TotalEnergies SE

Accent Resources

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Accent Resources NL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Accent Resources reported solid returns over the last few months and may actually be approaching a breakup point.

TotalEnergies SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TotalEnergies SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Accent Resources and TotalEnergies

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

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.