Correlation Between CCL Industries and Total Energy

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

By analyzing existing cross correlation between CCL Industries and Total Energy Services, you can compare the effects of market volatilities on CCL Industries and Total Energy 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 CCL Industries with a short position of Total Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Total Energy.

Diversification Opportunities for CCL Industries and Total Energy

0.85

Correlation Coefficient

CCL Industries  Total Energy

Very poor diversification

The 3 months correlation between CCL and Total is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Total Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Energy Services and CCL Industries 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 CCL Industries are associated (or correlated) with Total Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Energy Services has no effect on the direction of CCL Industries i.e., CCL Industries and Total Energy go up and down completely randomly.

Pair Corralation between CCL Industries and Total Energy

Assuming the 90 days trading horizon CCL Industries is expected to generate 1.29 times less return on investment than Total Energy. But when comparing it to its historical volatility, CCL Industries is 1.52 times less risky than Total Energy. It trades about 0.21 of its potential returns per unit of risk. Total Energy Services is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  902.00  in Total Energy Services on April 23, 2025 and sell it today you would earn a total of  191.00  from holding Total Energy Services or generate 21.18% return on investment over 90 days.

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

CCL Industries  vs.  Total Energy Services

CCL Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CCL Industries are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CCL Industries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Total Energy Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Total Energy Services are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Total Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CCL Industries and Total Energy

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

The idea behind CCL Industries and Total Energy Services 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.