Correlation Between Technip Energies and Voltalia

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

Diversification Opportunities for Technip Energies and Voltalia

TechnipVoltaliaDiversified AwayTechnipVoltaliaDiversified Away100%
-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Technip and Voltalia is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Technip Energies BV and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia 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 Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of Technip Energies i.e., Technip Energies and Voltalia go up and down completely randomly.

Pair Corralation between Technip Energies and Voltalia

Assuming the 90 days horizon Technip Energies BV is expected to generate 0.78 times more return on investment than Voltalia. However, Technip Energies BV is 1.28 times less risky than Voltalia. It trades about 0.13 of its potential returns per unit of risk. Voltalia SA is currently generating about -0.02 per unit of risk. If you would invest  2,176  in Technip Energies BV on September 16, 2024 and sell it today you would earn a total of  426.00  from holding Technip Energies BV or generate 19.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Technip Energies BV  vs.  Voltalia SA

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -10-505101520
JavaScript chart by amCharts 3.21.15TE VLTSA
       Timeline  
Technip Energies 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Technip Energies BV are ranked lower than 10 (%) 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec20212223242526
Voltalia SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Voltalia SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Voltalia is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec77.588.599.5

Technip Energies and Voltalia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.88-5.15-3.43-1.70.01.823.685.537.39 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15TE VLTSA
       Returns  

Pair Trading with Technip Energies and Voltalia

The main advantage of trading using opposite Technip Energies and Voltalia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technip Energies position performs unexpectedly, Voltalia 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 Voltalia will offset losses from the drop in Voltalia's long position.
The idea behind Technip Energies BV and Voltalia 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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