Correlation Between Technip Energies and Courtois

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

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

Diversification Opportunities for Technip Energies and Courtois

-0.28

Correlation Coefficient

Technip Energies  Courtois

Very good diversification

The 3 months correlation between Technip and Courtois is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and Courtois SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Courtois SA and Technip Energies 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 Technip Energies BV are associated (or correlated) with Courtois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Courtois SA has no effect on the direction of Technip Energies i.e., Technip Energies and Courtois go up and down completely randomly.

Pair Corralation between Technip Energies and Courtois

Assuming the 90 days horizon Technip Energies BV is expected to generate 1.08 times more return on investment than Courtois. However, Technip Energies is 1.08 times more volatile than Courtois SA. It trades about 0.43 of its potential returns per unit of risk. Courtois SA is currently generating about 0.01 per unit of risk. If you would invest  2,390  in Technip Energies BV on October 10, 2024 and sell it today you would earn a total of  310.00  from holding Technip Energies BV or generate 12.97% return on investment over 90 days.

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

Technip Energies BV  vs.  Courtois SA

Technip Energies

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Technip Energies BV are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Technip Energies sustained solid returns over the last few months and may actually be approaching a breakup point.

Courtois SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Courtois SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Courtois is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Technip Energies and Courtois

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

The idea behind Technip Energies BV and Courtois SA 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.