Correlation Between Benchmark Metals and Total Energy

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

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

Diversification Opportunities for Benchmark Metals and Total Energy

-0.09

Correlation Coefficient

Benchmark Metals  Total Energy

Good diversification

The 3 months correlation between Benchmark and Total is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Metals 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 Benchmark Metals 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 Benchmark Metals 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 Benchmark Metals i.e., Benchmark Metals and Total Energy go up and down completely randomly.

Pair Corralation between Benchmark Metals and Total Energy

Assuming the 90 days horizon Benchmark Metals is expected to generate 1.53 times less return on investment than Total Energy. But when comparing it to its historical volatility, Benchmark Metals is 1.26 times less risky than Total Energy. It trades about 0.06 of its potential returns per unit of risk. Total Energy Services is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,374  in Total Energy Services on August 29, 2025 and sell it today you would earn a total of  52.00  from holding Total Energy Services or generate 3.78% return on investment over 90 days.

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

Benchmark Metals  vs.  Total Energy Services

Benchmark Metals

Risk-Adjusted Performance

Weakest

Over the last 90 days Benchmark Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Benchmark Metals is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Total Energy Services

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Total Energy Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Total Energy may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Benchmark Metals and Total Energy

The main advantage of trading using opposite Benchmark Metals and Total Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Metals 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 Benchmark Metals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.