Correlation Between Groupe Tera and Neotion SA
Can any of the company-specific risk be diversified away by investing in both Groupe Tera and Neotion SA 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 Groupe Tera and Neotion SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe Tera SA and Neotion SA, you can compare the effects of market volatilities on Groupe Tera and Neotion SA 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 Groupe Tera with a short position of Neotion SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Tera and Neotion SA.
Diversification Opportunities for Groupe Tera and Neotion SA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Groupe and Neotion is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Tera SA and Neotion SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neotion SA and Groupe Tera 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 Groupe Tera SA are associated (or correlated) with Neotion SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neotion SA has no effect on the direction of Groupe Tera i.e., Groupe Tera and Neotion SA go up and down completely randomly.
Pair Corralation between Groupe Tera and Neotion SA
If you would invest 50.00 in Neotion SA on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Neotion SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupe Tera SA vs. Neotion SA
Performance |
| Timeline |
| Groupe Tera SA |
| Neotion SA |
Groupe Tera and Neotion SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe Tera and Neotion SA
The main advantage of trading using opposite Groupe Tera and Neotion SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe Tera position performs unexpectedly, Neotion SA 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 Neotion SA will offset losses from the drop in Neotion SA's long position.The idea behind Groupe Tera SA and Neotion 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.| Neotion SA vs. Hitechpros | Neotion SA vs. Technip Energies BV | Neotion SA vs. Seche Environnem | Neotion SA vs. X Fab Silicon |
Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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