Correlation Between Compagnie and Technip Energies
Can any of the company-specific risk be diversified away by investing in both Compagnie 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 Compagnie and Technip Energies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Saint Gobain and Technip Energies BV, you can compare the effects of market volatilities on Compagnie 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 Compagnie with a short position of Technip Energies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Technip Energies.
Diversification Opportunities for Compagnie and Technip Energies
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Compagnie and Technip is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Technip Energies BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technip Energies and Compagnie 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 Compagnie de Saint Gobain 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 Compagnie i.e., Compagnie and Technip Energies go up and down completely randomly.
Pair Corralation between Compagnie and Technip Energies
Assuming the 90 days trading horizon Compagnie de Saint Gobain is expected to generate 0.68 times more return on investment than Technip Energies. However, Compagnie de Saint Gobain is 1.47 times less risky than Technip Energies. It trades about 0.08 of its potential returns per unit of risk. Technip Energies BV is currently generating about 0.04 per unit of risk. If you would invest 5,986 in Compagnie de Saint Gobain on September 23, 2024 and sell it today you would earn a total of 2,540 from holding Compagnie de Saint Gobain or generate 42.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Compagnie de Saint Gobain vs. Technip Energies BV
Performance |
Timeline |
Compagnie de Saint |
Technip Energies |
Compagnie and Technip Energies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Compagnie and Technip Energies
The main advantage of trading using opposite Compagnie and Technip Energies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie 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.Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
Technip Energies vs. Gaztransport Technigaz SAS | Technip Energies vs. TotalEnergies SE | Technip Energies vs. Neoen SA | Technip Energies vs. Rubis SCA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |