Correlation Between TotalEnergies and Oeneo SA

Can any of the company-specific risk be diversified away by investing in both TotalEnergies and Oeneo SA 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 Oeneo SA 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 Oeneo SA, you can compare the effects of market volatilities on TotalEnergies and Oeneo SA 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 Oeneo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of TotalEnergies and Oeneo SA.

Diversification Opportunities for TotalEnergies and Oeneo SA

-0.19

Correlation Coefficient

TotalEnergies  Oeneo SA

Good diversification

The 3 months correlation between TotalEnergies and Oeneo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies EP Gabon and Oeneo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oeneo SA 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 Oeneo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oeneo SA has no effect on the direction of TotalEnergies i.e., TotalEnergies and Oeneo SA go up and down completely randomly.

Pair Corralation between TotalEnergies and Oeneo SA

Assuming the 90 days horizon TotalEnergies EP Gabon is expected to generate 2.86 times more return on investment than Oeneo SA. However, TotalEnergies is 2.86 times more volatile than Oeneo SA. It trades about 0.18 of its potential returns per unit of risk. Oeneo SA is currently generating about -0.09 per unit of risk. If you would invest  13,194  in TotalEnergies EP Gabon on December 29, 2024 and sell it today you would earn a total of  5,756  from holding TotalEnergies EP Gabon or generate 43.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

TotalEnergies EP Gabon  vs.  Oeneo SA

TotalEnergies EP Gabon

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TotalEnergies EP Gabon are ranked lower than 13 (%) 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.

Oeneo SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with TotalEnergies and Oeneo SA

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

The idea behind TotalEnergies EP Gabon and Oeneo SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.