Correlation Between TotalEnergies and Altareit

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

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

Diversification Opportunities for TotalEnergies and Altareit

-0.81

Correlation Coefficient

TotalEnergies  Altareit

Pay attention - limited upside

The 3 months correlation between TotalEnergies and Altareit is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE and Altareit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altareit 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 Altareit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altareit has no effect on the direction of TotalEnergies i.e., TotalEnergies and Altareit go up and down completely randomly.

Pair Corralation between TotalEnergies and Altareit

Assuming the 90 days trading horizon TotalEnergies SE is expected to under-perform the Altareit. In addition to that, TotalEnergies is 5.32 times more volatile than Altareit. It trades about -0.19 of its total potential returns per unit of risk. Altareit is currently generating about 0.11 per unit of volatility. If you would invest  46,200  in Altareit on September 25, 2024 and sell it today you would earn a total of  800.00  from holding Altareit or generate 1.73% return on investment over 90 days.

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

TotalEnergies SE  vs.  Altareit

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Altareit

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altareit are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Altareit is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with TotalEnergies and Altareit

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

The idea behind TotalEnergies SE and Altareit 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..