Correlation Between NSE SA and Groupe Sfpi
Can any of the company-specific risk be diversified away by investing in both NSE SA and Groupe Sfpi 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 NSE SA and Groupe Sfpi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NSE SA and Groupe Sfpi, you can compare the effects of market volatilities on NSE SA and Groupe Sfpi 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 NSE SA with a short position of Groupe Sfpi. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSE SA and Groupe Sfpi.
Diversification Opportunities for NSE SA and Groupe Sfpi
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between NSE and Groupe is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NSE SA and Groupe Sfpi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Sfpi and NSE SA 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 NSE SA are associated (or correlated) with Groupe Sfpi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Sfpi has no effect on the direction of NSE SA i.e., NSE SA and Groupe Sfpi go up and down completely randomly.
Pair Corralation between NSE SA and Groupe Sfpi
Assuming the 90 days trading horizon NSE SA is expected to generate 1.09 times more return on investment than Groupe Sfpi. However, NSE SA is 1.09 times more volatile than Groupe Sfpi. It trades about 0.06 of its potential returns per unit of risk. Groupe Sfpi is currently generating about 0.01 per unit of risk. If you would invest 1,647 in NSE SA on August 24, 2024 and sell it today you would earn a total of 1,233 from holding NSE SA or generate 74.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NSE SA vs. Groupe Sfpi
Performance |
| Timeline |
| NSE SA |
| Groupe Sfpi |
NSE SA and Groupe Sfpi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSE SA and Groupe Sfpi
The main advantage of trading using opposite NSE SA and Groupe Sfpi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSE SA position performs unexpectedly, Groupe Sfpi 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 Groupe Sfpi will offset losses from the drop in Groupe Sfpi's long position.The idea behind NSE SA and Groupe Sfpi 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.| Groupe Sfpi vs. Groupe Guillin SA | Groupe Sfpi vs. Stef SA | Groupe Sfpi vs. SA Catana Group | Groupe Sfpi vs. Jacquet Metal Service |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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