Correlation Between NSC Groupe and Derichebourg
Can any of the company-specific risk be diversified away by investing in both NSC Groupe and Derichebourg 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 NSC Groupe and Derichebourg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NSC Groupe SA and Derichebourg, you can compare the effects of market volatilities on NSC Groupe and Derichebourg 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 NSC Groupe with a short position of Derichebourg. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSC Groupe and Derichebourg.
Diversification Opportunities for NSC Groupe and Derichebourg
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between NSC and Derichebourg is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NSC Groupe SA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and NSC Groupe 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 NSC Groupe SA are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of NSC Groupe i.e., NSC Groupe and Derichebourg go up and down completely randomly.
Pair Corralation between NSC Groupe and Derichebourg
Assuming the 90 days trading horizon NSC Groupe SA is expected to generate 2.76 times more return on investment than Derichebourg. However, NSC Groupe is 2.76 times more volatile than Derichebourg. It trades about 0.08 of its potential returns per unit of risk. Derichebourg is currently generating about 0.02 per unit of risk. If you would invest 5,000 in NSC Groupe SA on September 12, 2024 and sell it today you would earn a total of 1,150 from holding NSC Groupe SA or generate 23.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NSC Groupe SA vs. Derichebourg
Performance |
| Timeline |
| NSC Groupe SA |
| Derichebourg |
NSC Groupe and Derichebourg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSC Groupe and Derichebourg
The main advantage of trading using opposite NSC Groupe and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSC Groupe position performs unexpectedly, Derichebourg 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 Derichebourg will offset losses from the drop in Derichebourg's long position.| NSC Groupe vs. Guandao Puer Investment | NSC Groupe vs. Hotel Majestic Cannes | NSC Groupe vs. Groupe Pizzorno Environnement | NSC Groupe vs. Axway Software |
| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg vs. Rubis SCA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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