Correlation Between TotalEnergies and Adeunis

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

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

Diversification Opportunities for TotalEnergies and Adeunis

-0.63

Correlation Coefficient

TotalEnergies  Adeunis

Excellent diversification

The 3 months correlation between TotalEnergies and Adeunis is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE and Adeunis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adeunis 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 Adeunis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adeunis has no effect on the direction of TotalEnergies i.e., TotalEnergies and Adeunis go up and down completely randomly.

Pair Corralation between TotalEnergies and Adeunis

Assuming the 90 days trading horizon TotalEnergies SE is expected to under-perform the Adeunis. But the stock apears to be less risky and, when comparing its historical volatility, TotalEnergies SE is 7.05 times less risky than Adeunis. The stock trades about -0.03 of its potential returns per unit of risk. The Adeunis is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Adeunis on September 26, 2024 and sell it today you would lose (2.00) from holding Adeunis or give up 2.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.68%
Values	Daily Returns

TotalEnergies SE  vs.  Adeunis

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.

Adeunis

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Adeunis are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Adeunis reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TotalEnergies and Adeunis

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

The idea behind TotalEnergies SE and Adeunis 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.