Correlation Between Energisme and FNP Technologies
Can any of the company-specific risk be diversified away by investing in both Energisme and FNP Technologies 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 Energisme and FNP Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energisme and FNP Technologies SA, you can compare the effects of market volatilities on Energisme and FNP Technologies 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 Energisme with a short position of FNP Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisme and FNP Technologies.
Diversification Opportunities for Energisme and FNP Technologies
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energisme and FNP is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Energisme and FNP Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNP Technologies and Energisme 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 Energisme are associated (or correlated) with FNP Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNP Technologies has no effect on the direction of Energisme i.e., Energisme and FNP Technologies go up and down completely randomly.
Pair Corralation between Energisme and FNP Technologies
Assuming the 90 days trading horizon Energisme is expected to under-perform the FNP Technologies. In addition to that, Energisme is 1.4 times more volatile than FNP Technologies SA. It trades about -0.07 of its total potential returns per unit of risk. FNP Technologies SA is currently generating about -0.03 per unit of volatility. If you would invest 43.00 in FNP Technologies SA on August 26, 2024 and sell it today you would lose (37.00) from holding FNP Technologies SA or give up 86.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.27% |
| Values | Daily Returns |
Energisme vs. FNP Technologies SA
Performance |
| Timeline |
| Energisme |
| FNP Technologies |
Energisme and FNP Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energisme and FNP Technologies
The main advantage of trading using opposite Energisme and FNP Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energisme position performs unexpectedly, FNP Technologies 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 FNP Technologies will offset losses from the drop in FNP Technologies' long position.| Energisme vs. Blockchain Group SA | Energisme vs. FNP Technologies SA | Energisme vs. Manitou BF SA | Energisme vs. Ossiam Minimum Variance |
| FNP Technologies vs. Blockchain Group SA | FNP Technologies vs. Manitou BF SA | FNP Technologies vs. Ossiam Minimum Variance | FNP Technologies vs. Granite 3x LVMH |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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