Correlation Between NSC Groupe and Eutelsat Communications
Can any of the company-specific risk be diversified away by investing in both NSC Groupe and Eutelsat Communications 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 Eutelsat Communications 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 Eutelsat Communications SA, you can compare the effects of market volatilities on NSC Groupe and Eutelsat Communications 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 Eutelsat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSC Groupe and Eutelsat Communications.
Diversification Opportunities for NSC Groupe and Eutelsat Communications
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NSC and Eutelsat is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NSC Groupe SA and Eutelsat Communications SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eutelsat Communications 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 Eutelsat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eutelsat Communications has no effect on the direction of NSC Groupe i.e., NSC Groupe and Eutelsat Communications go up and down completely randomly.
Pair Corralation between NSC Groupe and Eutelsat Communications
Assuming the 90 days trading horizon NSC Groupe SA is expected to generate 1.48 times more return on investment than Eutelsat Communications. However, NSC Groupe is 1.48 times more volatile than Eutelsat Communications SA. It trades about -0.12 of its potential returns per unit of risk. Eutelsat Communications SA is currently generating about -0.47 per unit of risk. If you would invest 6,750 in NSC Groupe SA on September 1, 2024 and sell it today you would lose (750.00) from holding NSC Groupe SA or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NSC Groupe SA vs. Eutelsat Communications SA
Performance |
| Timeline |
| NSC Groupe SA |
| Eutelsat Communications |
NSC Groupe and Eutelsat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSC Groupe and Eutelsat Communications
The main advantage of trading using opposite NSC Groupe and Eutelsat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSC Groupe position performs unexpectedly, Eutelsat Communications 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 Eutelsat Communications will offset losses from the drop in Eutelsat Communications' long position.| NSC Groupe vs. Technip Energies BV | NSC Groupe vs. Credit Agricole SA | NSC Groupe vs. Mauna Kea Technologies | NSC Groupe vs. Eutelsat Communications SA |
| Eutelsat Communications vs. SES S A | Eutelsat Communications vs. Rubis SCA | Eutelsat Communications vs. Coface SA | Eutelsat Communications vs. SCOR SE |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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