Correlation Between TotalEnergies and Intel

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

By analyzing existing cross correlation between TotalEnergies SE and Intel, you can compare the effects of market volatilities on TotalEnergies and Intel 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 with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of TotalEnergies and Intel.

Diversification Opportunities for TotalEnergies and Intel

-0.33

Correlation Coefficient

TotalEnergies  Intel

Very good diversification

The 3 months correlation between TotalEnergies and Intel is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and TotalEnergies 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 SE are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of TotalEnergies i.e., TotalEnergies and Intel go up and down completely randomly.

Pair Corralation between TotalEnergies and Intel

Assuming the 90 days trading horizon TotalEnergies SE is expected to generate 0.38 times more return on investment than Intel. However, TotalEnergies SE is 2.65 times less risky than Intel. It trades about -0.28 of its potential returns per unit of risk. Intel is currently generating about -0.19 per unit of risk. If you would invest  5,761  in TotalEnergies SE on September 16, 2024 and sell it today you would lose (426.00) from holding TotalEnergies SE or give up 7.39% of portfolio value over 90 days.

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

TotalEnergies SE  vs.  Intel

TotalEnergies SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TotalEnergies SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Intel

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Intel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TotalEnergies and Intel

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

The idea behind TotalEnergies SE and Intel 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..