Correlation Between TotalEnergies and Immobiliere Dassault

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

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

Diversification Opportunities for TotalEnergies and Immobiliere Dassault

0.05

Correlation Coefficient

TotalEnergies  Immobiliere Dassault

Significant diversification

The 3 months correlation between TotalEnergies and Immobiliere is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE and Immobiliere Dassault SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobiliere Dassault 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 Immobiliere Dassault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobiliere Dassault has no effect on the direction of TotalEnergies i.e., TotalEnergies and Immobiliere Dassault go up and down completely randomly.

Pair Corralation between TotalEnergies and Immobiliere Dassault

Assuming the 90 days trading horizon TotalEnergies is expected to generate 1.14 times less return on investment than Immobiliere Dassault. But when comparing it to its historical volatility, TotalEnergies SE is 1.07 times less risky than Immobiliere Dassault. It trades about 0.19 of its potential returns per unit of risk. Immobiliere Dassault SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,620  in Immobiliere Dassault SA on February 1, 2024 and sell it today you would earn a total of  210.00  from holding Immobiliere Dassault SA or generate 4.55% return on investment over 90 days.

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

TotalEnergies SE  vs.  Immobiliere Dassault SA

TotalEnergies SE

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TotalEnergies SE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, TotalEnergies sustained solid returns over the last few months and may actually be approaching a breakup point.

Immobiliere Dassault

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Immobiliere Dassault SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Immobiliere Dassault is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with TotalEnergies and Immobiliere Dassault

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

The idea behind TotalEnergies SE and Immobiliere Dassault 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.