Correlation Between ECOBANK TRANSNATIONAL and TOTALENERGIES MARKETING

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

By analyzing existing cross correlation between ECOBANK TRANSNATIONAL INCORPORATED and TOTALENERGIES MARKETING NIGERIA, you can compare the effects of market volatilities on ECOBANK TRANSNATIONAL and TOTALENERGIES MARKETING 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 ECOBANK TRANSNATIONAL with a short position of TOTALENERGIES MARKETING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECOBANK TRANSNATIONAL and TOTALENERGIES MARKETING.

Diversification Opportunities for ECOBANK TRANSNATIONAL and TOTALENERGIES MARKETING

0.31

Correlation Coefficient

ECOBANK TRANSNATIONAL  TOTALENERGIES MARKETING

Weak diversification

The 3 months correlation between ECOBANK and TOTALENERGIES is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ECOBANK TRANSNATIONAL INCORPOR and TOTALENERGIES MARKETING NIGERI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTALENERGIES MARKETING and ECOBANK TRANSNATIONAL 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 ECOBANK TRANSNATIONAL INCORPORATED are associated (or correlated) with TOTALENERGIES MARKETING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTALENERGIES MARKETING has no effect on the direction of ECOBANK TRANSNATIONAL i.e., ECOBANK TRANSNATIONAL and TOTALENERGIES MARKETING go up and down completely randomly.

Pair Corralation between ECOBANK TRANSNATIONAL and TOTALENERGIES MARKETING

Assuming the 90 days trading horizon ECOBANK TRANSNATIONAL INCORPORATED is expected to generate 1.73 times more return on investment than TOTALENERGIES MARKETING. However, ECOBANK TRANSNATIONAL is 1.73 times more volatile than TOTALENERGIES MARKETING NIGERIA. It trades about 0.04 of its potential returns per unit of risk. TOTALENERGIES MARKETING NIGERIA is currently generating about -0.05 per unit of risk. If you would invest  2,800  in ECOBANK TRANSNATIONAL INCORPORATED on December 27, 2024 and sell it today you would earn a total of  140.00  from holding ECOBANK TRANSNATIONAL INCORPORATED or generate 5.0% return on investment over 90 days.

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

ECOBANK TRANSNATIONAL INCORPOR  vs.  TOTALENERGIES MARKETING NIGERI

ECOBANK TRANSNATIONAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ECOBANK TRANSNATIONAL INCORPORATED are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ECOBANK TRANSNATIONAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TOTALENERGIES MARKETING

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOTALENERGIES MARKETING NIGERIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, TOTALENERGIES MARKETING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ECOBANK TRANSNATIONAL and TOTALENERGIES MARKETING

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

The idea behind ECOBANK TRANSNATIONAL INCORPORATED and TOTALENERGIES MARKETING NIGERIA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.