Correlation Between Technip Energies and Foncire 7

Can any of the company-specific risk be diversified away by investing in both Technip Energies and Foncire 7 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 Foncire 7 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 Foncire 7 investissement, you can compare the effects of market volatilities on Technip Energies and Foncire 7 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 Foncire 7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technip Energies and Foncire 7.

Diversification Opportunities for Technip Energies and Foncire 7

0.43

Correlation Coefficient

Technip Energies  Foncire 7

Very weak diversification

The 3 months correlation between Technip and Foncire is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and Foncire 7 investissement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foncire 7 investissement 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 Foncire 7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foncire 7 investissement has no effect on the direction of Technip Energies i.e., Technip Energies and Foncire 7 go up and down completely randomly.

Pair Corralation between Technip Energies and Foncire 7

Assuming the 90 days horizon Technip Energies is expected to generate 1.45 times less return on investment than Foncire 7. But when comparing it to its historical volatility, Technip Energies BV is 1.84 times less risky than Foncire 7. It trades about 0.19 of its potential returns per unit of risk. Foncire 7 investissement is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Foncire 7 investissement on December 21, 2024 and sell it today you would earn a total of  10.00  from holding Foncire 7 investissement or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Technip Energies BV  vs.  Foncire 7 investissement

Technip Energies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Technip Energies BV are ranked lower than 14 (%) 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.

Foncire 7 investissement

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Foncire 7 investissement are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Foncire 7 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Technip Energies and Foncire 7

The main advantage of trading using opposite Technip Energies and Foncire 7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technip Energies position performs unexpectedly, Foncire 7 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 Foncire 7 will offset losses from the drop in Foncire 7's long position.

The idea behind Technip Energies BV and Foncire 7 investissement 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .