Correlation Between Mauna Kea and Technip Energies

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

By analyzing existing cross correlation between Mauna Kea Technologies and Technip Energies BV, you can compare the effects of market volatilities on Mauna Kea 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 Mauna Kea with a short position of Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauna Kea and Technip Energies.

Diversification Opportunities for Mauna Kea and Technip Energies

-0.49

Correlation Coefficient

Mauna Kea  Technip Energies

Very good diversification

The 3 months correlation between Mauna and Technip is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mauna Kea Technologies and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and Mauna Kea 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 Mauna Kea Technologies 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 Mauna Kea i.e., Mauna Kea and Technip Energies go up and down completely randomly.

Pair Corralation between Mauna Kea and Technip Energies

Assuming the 90 days trading horizon Mauna Kea is expected to generate 1.32 times less return on investment than Technip Energies. In addition to that, Mauna Kea is 2.7 times more volatile than Technip Energies BV. It trades about 0.1 of its total potential returns per unit of risk. Technip Energies BV is currently generating about 0.34 per unit of volatility. If you would invest  2,520  in Technip Energies BV on October 23, 2024 and sell it today you would earn a total of  244.00  from holding Technip Energies BV or generate 9.68% return on investment over 90 days.

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

Mauna Kea Technologies  vs.  Technip Energies BV

Mauna Kea Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mauna Kea Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Technip Energies

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technip Energies BV are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Technip Energies sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mauna Kea and Technip Energies

The main advantage of trading using opposite Mauna Kea and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauna Kea 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 Mauna Kea Technologies 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..