Correlation Between TOTALENERGIES MARKETING and SECURE ELECTRONIC

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

Diversification Opportunities for TOTALENERGIES MARKETING and SECURE ELECTRONIC

-0.69

Correlation Coefficient

TOTALENERGIES MARKETING  SECURE ELECTRONIC

Excellent diversification

The 3 months correlation between TOTALENERGIES and SECURE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding TOTALENERGIES MARKETING NIGERI and SECURE ELECTRONIC TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECURE ELECTRONIC 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 SECURE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECURE ELECTRONIC has no effect on the direction of TOTALENERGIES MARKETING i.e., TOTALENERGIES MARKETING and SECURE ELECTRONIC go up and down completely randomly.

Pair Corralation between TOTALENERGIES MARKETING and SECURE ELECTRONIC

Assuming the 90 days trading horizon TOTALENERGIES MARKETING NIGERIA is expected to generate 0.39 times more return on investment than SECURE ELECTRONIC. However, TOTALENERGIES MARKETING NIGERIA is 2.6 times less risky than SECURE ELECTRONIC. It trades about 0.17 of its potential returns per unit of risk. SECURE ELECTRONIC TECHNOLOGY is currently generating about 0.06 per unit of risk. If you would invest  32,150  in TOTALENERGIES MARKETING NIGERIA on October 17, 2024 and sell it today you would earn a total of  32,600  from holding TOTALENERGIES MARKETING NIGERIA or generate 101.4% return on investment over 90 days.

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

TOTALENERGIES MARKETING NIGERI  vs.  SECURE ELECTRONIC TECHNOLOGY

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.

SECURE ELECTRONIC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SECURE ELECTRONIC TECHNOLOGY are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, SECURE ELECTRONIC demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TOTALENERGIES MARKETING and SECURE ELECTRONIC

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

The idea behind TOTALENERGIES MARKETING NIGERIA and SECURE ELECTRONIC TECHNOLOGY 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..