Correlation Between TotalEnergies and NFL Biosciences

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

By analyzing existing cross correlation between TotalEnergies EP Gabon and NFL Biosciences SAS, you can compare the effects of market volatilities on TotalEnergies and NFL Biosciences 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 TotalEnergies with a short position of NFL Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of TotalEnergies and NFL Biosciences.

Diversification Opportunities for TotalEnergies and NFL Biosciences

-0.69

Correlation Coefficient

TotalEnergies  NFL Biosciences

Excellent diversification

The 3 months correlation between TotalEnergies and NFL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies EP Gabon and NFL Biosciences SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFL Biosciences SAS and TotalEnergies 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 TotalEnergies EP Gabon are associated (or correlated) with NFL Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFL Biosciences SAS has no effect on the direction of TotalEnergies i.e., TotalEnergies and NFL Biosciences go up and down completely randomly.

Pair Corralation between TotalEnergies and NFL Biosciences

Assuming the 90 days horizon TotalEnergies EP Gabon is expected to generate 0.3 times more return on investment than NFL Biosciences. However, TotalEnergies EP Gabon is 3.33 times less risky than NFL Biosciences. It trades about 0.4 of its potential returns per unit of risk. NFL Biosciences SAS is currently generating about 0.08 per unit of risk. If you would invest  18,350  in TotalEnergies EP Gabon on October 3, 2024 and sell it today you would earn a total of  1,850  from holding TotalEnergies EP Gabon or generate 10.08% return on investment over 90 days.

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

TotalEnergies EP Gabon  vs.  NFL Biosciences SAS

TotalEnergies EP Gabon

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TotalEnergies EP Gabon are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TotalEnergies sustained solid returns over the last few months and may actually be approaching a breakup point.

NFL Biosciences SAS

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NFL Biosciences SAS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, NFL Biosciences is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with TotalEnergies and NFL Biosciences

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

The idea behind TotalEnergies EP Gabon and NFL Biosciences SAS 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.