Correlation Between TotalEnergies and Groupimo

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

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

Diversification Opportunities for TotalEnergies and Groupimo

0.18

Correlation Coefficient

TotalEnergies  Groupimo

Average diversification

The 3 months correlation between TotalEnergies and Groupimo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE and Groupimo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupimo SA 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 Groupimo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupimo SA has no effect on the direction of TotalEnergies i.e., TotalEnergies and Groupimo go up and down completely randomly.

Pair Corralation between TotalEnergies and Groupimo

Assuming the 90 days trading horizon TotalEnergies SE is expected to generate 0.16 times more return on investment than Groupimo. However, TotalEnergies SE is 6.2 times less risky than Groupimo. It trades about 0.01 of its potential returns per unit of risk. Groupimo SA is currently generating about -0.01 per unit of risk. If you would invest  5,298  in TotalEnergies SE on October 15, 2024 and sell it today you would earn a total of  227.00  from holding TotalEnergies SE or generate 4.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.22%
Values	Daily Returns

TotalEnergies SE  vs.  Groupimo SA

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 somewhat strong technical and fundamental indicators, TotalEnergies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Groupimo SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Groupimo SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Groupimo reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TotalEnergies and Groupimo

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

The idea behind TotalEnergies SE and Groupimo 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.