Correlation Between TOTALENERGIES MARKETING and INDUSTRIAL MEDICAL

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

By analyzing existing cross correlation between TOTALENERGIES MARKETING NIGERIA and INDUSTRIAL MEDICAL GASES, you can compare the effects of market volatilities on TOTALENERGIES MARKETING and INDUSTRIAL MEDICAL 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 TOTALENERGIES MARKETING with a short position of INDUSTRIAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTALENERGIES MARKETING and INDUSTRIAL MEDICAL.

Diversification Opportunities for TOTALENERGIES MARKETING and INDUSTRIAL MEDICAL

0.01

Correlation Coefficient

TOTALENERGIES MARKETING  INDUSTRIAL MEDICAL

Significant diversification

The 3 months correlation between TOTALENERGIES and INDUSTRIAL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding TOTALENERGIES MARKETING NIGERI and INDUSTRIAL MEDICAL GASES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIAL MEDICAL GASES and TOTALENERGIES MARKETING 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 TOTALENERGIES MARKETING NIGERIA are associated (or correlated) with INDUSTRIAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIAL MEDICAL GASES has no effect on the direction of TOTALENERGIES MARKETING i.e., TOTALENERGIES MARKETING and INDUSTRIAL MEDICAL go up and down completely randomly.

Pair Corralation between TOTALENERGIES MARKETING and INDUSTRIAL MEDICAL

Assuming the 90 days trading horizon TOTALENERGIES MARKETING NIGERIA is expected to under-perform the INDUSTRIAL MEDICAL. In addition to that, TOTALENERGIES MARKETING is 1.24 times more volatile than INDUSTRIAL MEDICAL GASES. It trades about -0.08 of its total potential returns per unit of risk. INDUSTRIAL MEDICAL GASES is currently generating about 0.13 per unit of volatility. If you would invest  3,500  in INDUSTRIAL MEDICAL GASES on October 8, 2024 and sell it today you would earn a total of  295.00  from holding INDUSTRIAL MEDICAL GASES or generate 8.43% return on investment over 90 days.

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

TOTALENERGIES MARKETING NIGERI  vs.  INDUSTRIAL MEDICAL GASES

TOTALENERGIES MARKETING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOTALENERGIES MARKETING NIGERIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, TOTALENERGIES MARKETING is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

INDUSTRIAL MEDICAL GASES

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INDUSTRIAL MEDICAL GASES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, INDUSTRIAL MEDICAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with TOTALENERGIES MARKETING and INDUSTRIAL MEDICAL

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

The idea behind TOTALENERGIES MARKETING NIGERIA and INDUSTRIAL MEDICAL GASES 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.