Correlation Between FIDELITY BANK and TOTALENERGIES MARKETING

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

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

Diversification Opportunities for FIDELITY BANK and TOTALENERGIES MARKETING

0.36

Correlation Coefficient

FIDELITY BANK  TOTALENERGIES MARKETING

Weak diversification

The 3 months correlation between FIDELITY and TOTALENERGIES is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FIDELITY BANK PLC and TOTALENERGIES MARKETING NIGERI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTALENERGIES MARKETING and FIDELITY BANK 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 FIDELITY BANK PLC 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 FIDELITY BANK i.e., FIDELITY BANK and TOTALENERGIES MARKETING go up and down completely randomly.

Pair Corralation between FIDELITY BANK and TOTALENERGIES MARKETING

Assuming the 90 days trading horizon FIDELITY BANK PLC is expected to generate 1.37 times more return on investment than TOTALENERGIES MARKETING. However, FIDELITY BANK is 1.37 times more volatile than TOTALENERGIES MARKETING NIGERIA. It trades about 0.07 of its potential returns per unit of risk. TOTALENERGIES MARKETING NIGERIA is currently generating about 0.02 per unit of risk. If you would invest  1,730  in FIDELITY BANK PLC on December 30, 2024 and sell it today you would earn a total of  170.00  from holding FIDELITY BANK PLC or generate 9.83% return on investment over 90 days.

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

FIDELITY BANK PLC  vs.  TOTALENERGIES MARKETING NIGERI

FIDELITY BANK PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FIDELITY BANK PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental drivers, FIDELITY BANK may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TOTALENERGIES MARKETING

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TOTALENERGIES MARKETING NIGERIA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, TOTALENERGIES MARKETING is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FIDELITY BANK and TOTALENERGIES MARKETING

The main advantage of trading using opposite FIDELITY BANK and TOTALENERGIES MARKETING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIDELITY BANK 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 FIDELITY BANK PLC 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.