Correlation Between Intl Star and Technip Energies

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

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

Diversification Opportunities for Intl Star and Technip Energies

-0.13

Correlation Coefficient

Intl Star  Technip Energies

Good diversification

The 3 months correlation between Intl and Technip is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Intl Star and Technip Energies NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and Intl Star 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 Intl Star 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 Intl Star i.e., Intl Star and Technip Energies go up and down completely randomly.

Pair Corralation between Intl Star and Technip Energies

Given the investment horizon of 90 days Intl Star is expected to under-perform the Technip Energies. In addition to that, Intl Star is 2.01 times more volatile than Technip Energies NV. It trades about -0.13 of its total potential returns per unit of risk. Technip Energies NV is currently generating about 0.12 per unit of volatility. If you would invest  2,483  in Technip Energies NV on October 10, 2024 and sell it today you would earn a total of  182.00  from holding Technip Energies NV or generate 7.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Intl Star  vs.  Technip Energies NV

Intl Star

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intl Star has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Technip Energies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Technip Energies NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Technip Energies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Intl Star and Technip Energies

The main advantage of trading using opposite Intl Star and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intl Star 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 Intl Star and Technip Energies NV 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 CEOs Directory module to screen CEOs from public companies around the world.