Correlation Between FIBRA Storage and TotalEnergies

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

By analyzing existing cross correlation between FIBRA Storage and TotalEnergies SE, you can compare the effects of market volatilities on FIBRA Storage and TotalEnergies 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 FIBRA Storage with a short position of TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIBRA Storage and TotalEnergies.

Diversification Opportunities for FIBRA Storage and TotalEnergies

0.63

Correlation Coefficient

FIBRA Storage  TotalEnergies

Poor diversification

The 3 months correlation between FIBRA and TotalEnergies is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding FIBRA Storage and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE and FIBRA Storage 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 FIBRA Storage are associated (or correlated) with TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of FIBRA Storage i.e., FIBRA Storage and TotalEnergies go up and down completely randomly.

Pair Corralation between FIBRA Storage and TotalEnergies

Assuming the 90 days trading horizon FIBRA Storage is expected to generate 1.02 times less return on investment than TotalEnergies. In addition to that, FIBRA Storage is 1.02 times more volatile than TotalEnergies SE. It trades about 0.21 of its total potential returns per unit of risk. TotalEnergies SE is currently generating about 0.22 per unit of volatility. If you would invest  108,871  in TotalEnergies SE on December 27, 2024 and sell it today you would earn a total of  19,723  from holding TotalEnergies SE or generate 18.12% return on investment over 90 days.

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

FIBRA Storage  vs.  TotalEnergies SE

FIBRA Storage

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FIBRA Storage are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, FIBRA Storage exhibited solid returns over the last few months and may actually be approaching a breakup point.

TotalEnergies SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TotalEnergies SE are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, TotalEnergies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIBRA Storage and TotalEnergies

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

The idea behind FIBRA Storage and TotalEnergies SE 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.