Correlation Between VFD GROUP and TOTALENERGIES MARKETING

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

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

Diversification Opportunities for VFD GROUP and TOTALENERGIES MARKETING

-0.11

Correlation Coefficient

VFD GROUP  TOTALENERGIES MARKETING

Good diversification

The 3 months correlation between VFD and TOTALENERGIES is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding VFD GROUP and TOTALENERGIES MARKETING NIGERI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTALENERGIES MARKETING and VFD GROUP 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 VFD GROUP are associated (or correlated) with TOTALENERGIES MARKETING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTALENERGIES MARKETING has no effect on the direction of VFD GROUP i.e., VFD GROUP and TOTALENERGIES MARKETING go up and down completely randomly.

Pair Corralation between VFD GROUP and TOTALENERGIES MARKETING

Assuming the 90 days trading horizon VFD GROUP is expected to under-perform the TOTALENERGIES MARKETING. In addition to that, VFD GROUP is 2.79 times more volatile than TOTALENERGIES MARKETING NIGERIA. It trades about -0.06 of its total potential returns per unit of risk. TOTALENERGIES MARKETING NIGERIA is currently generating about 0.18 per unit of volatility. If you would invest  32,150  in TOTALENERGIES MARKETING NIGERIA on October 22, 2024 and sell it today you would earn a total of  34,850  from holding TOTALENERGIES MARKETING NIGERIA or generate 108.4% return on investment over 90 days.

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

VFD GROUP  vs.  TOTALENERGIES MARKETING NIGERI

VFD GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VFD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VFD GROUP is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VFD GROUP and TOTALENERGIES MARKETING

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

The idea behind VFD GROUP and TOTALENERGIES MARKETING NIGERIA 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.