Correlation Between Technip Energies and Financiere Hoche

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

Diversification Opportunities for Technip Energies and Financiere Hoche

0.55

Correlation Coefficient

Technip Energies  Financiere Hoche

Very weak diversification

The 3 months correlation between Technip and Financiere is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and Financiere Hoche Bains Les Bai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financiere Hoche Bains 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 Financiere Hoche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financiere Hoche Bains has no effect on the direction of Technip Energies i.e., Technip Energies and Financiere Hoche go up and down completely randomly.

Pair Corralation between Technip Energies and Financiere Hoche

Assuming the 90 days horizon Technip Energies BV is expected to generate 0.77 times more return on investment than Financiere Hoche. However, Technip Energies BV is 1.3 times less risky than Financiere Hoche. It trades about 0.11 of its potential returns per unit of risk. Financiere Hoche Bains Les Bains is currently generating about 0.06 per unit of risk. If you would invest  2,454  in Technip Energies BV on October 6, 2024 and sell it today you would earn a total of  180.00  from holding Technip Energies BV or generate 7.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Technip Energies BV  vs.  Financiere Hoche Bains Les Bai

Technip Energies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Technip Energies BV are ranked lower than 13 (%) 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.

Financiere Hoche Bains

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Financiere Hoche Bains Les Bains are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Financiere Hoche is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Technip Energies and Financiere Hoche

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

The idea behind Technip Energies BV and Financiere Hoche Bains Les Bains 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 Stocks Directory module to find actively traded stocks across global markets.