Correlation Between TotalEnergies and Thermador Groupe

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

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

Diversification Opportunities for TotalEnergies and Thermador Groupe

0.65

Correlation Coefficient

TotalEnergies  Thermador Groupe

Poor diversification

The 3 months correlation between TotalEnergies and Thermador is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE and Thermador Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermador Groupe 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 Thermador Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermador Groupe has no effect on the direction of TotalEnergies i.e., TotalEnergies and Thermador Groupe go up and down completely randomly.

Pair Corralation between TotalEnergies and Thermador Groupe

Assuming the 90 days trading horizon TotalEnergies SE is expected to under-perform the Thermador Groupe. But the stock apears to be less risky and, when comparing its historical volatility, TotalEnergies SE is 1.07 times less risky than Thermador Groupe. The stock trades about -0.12 of its potential returns per unit of risk. The Thermador Groupe SA is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  7,800  in Thermador Groupe SA on August 31, 2024 and sell it today you would lose (850.00) from holding Thermador Groupe SA or give up 10.9% of portfolio value over 90 days.

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

TotalEnergies SE  vs.  Thermador Groupe 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 latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Thermador Groupe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermador Groupe SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with TotalEnergies and Thermador Groupe

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

The idea behind TotalEnergies SE and Thermador Groupe 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.