Correlation Between TOTAL GABON and ALBIS LEASING

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

By analyzing existing cross correlation between TOTAL GABON and ALBIS LEASING AG, you can compare the effects of market volatilities on TOTAL GABON and ALBIS LEASING 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 TOTAL GABON with a short position of ALBIS LEASING. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and ALBIS LEASING.

Diversification Opportunities for TOTAL GABON and ALBIS LEASING

0.16

Correlation Coefficient

TOTAL GABON  ALBIS LEASING

Average diversification

The 3 months correlation between TOTAL and ALBIS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON and ALBIS LEASING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBIS LEASING AG and TOTAL GABON 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 TOTAL GABON are associated (or correlated) with ALBIS LEASING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBIS LEASING AG has no effect on the direction of TOTAL GABON i.e., TOTAL GABON and ALBIS LEASING go up and down completely randomly.

Pair Corralation between TOTAL GABON and ALBIS LEASING

Assuming the 90 days trading horizon TOTAL GABON is expected to generate 2.76 times more return on investment than ALBIS LEASING. However, TOTAL GABON is 2.76 times more volatile than ALBIS LEASING AG. It trades about 0.11 of its potential returns per unit of risk. ALBIS LEASING AG is currently generating about 0.2 per unit of risk. If you would invest  15,850  in TOTAL GABON on September 12, 2024 and sell it today you would earn a total of  2,850  from holding TOTAL GABON or generate 17.98% return on investment over 90 days.

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

TOTAL GABON  vs.  ALBIS LEASING AG

TOTAL GABON

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TOTAL GABON are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TOTAL GABON exhibited solid returns over the last few months and may actually be approaching a breakup point.

ALBIS LEASING AG

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALBIS LEASING AG are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, ALBIS LEASING may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TOTAL GABON and ALBIS LEASING

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

The idea behind TOTAL GABON and ALBIS LEASING AG 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.