Correlation Between Nextedia and Claranova
Can any of the company-specific risk be diversified away by investing in both Nextedia and Claranova 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 Nextedia and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextedia and Claranova SE, you can compare the effects of market volatilities on Nextedia and Claranova 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 Nextedia with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextedia and Claranova.
Diversification Opportunities for Nextedia and Claranova
Good diversification
The 3 months correlation between Nextedia and Claranova is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nextedia and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Nextedia 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 Nextedia are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Nextedia i.e., Nextedia and Claranova go up and down completely randomly.
Pair Corralation between Nextedia and Claranova
Assuming the 90 days trading horizon Nextedia is expected to under-perform the Claranova. In addition to that, Nextedia is 1.26 times more volatile than Claranova SE. It trades about -0.02 of its total potential returns per unit of risk. Claranova SE is currently generating about 0.04 per unit of volatility. If you would invest 138.00 in Claranova SE on September 4, 2024 and sell it today you would earn a total of 2.00 from holding Claranova SE or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextedia vs. Claranova SE
Performance |
| Timeline |
| Nextedia |
| Claranova SE |
Nextedia and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextedia and Claranova
The main advantage of trading using opposite Nextedia and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextedia position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.| Nextedia vs. Melexis NV | Nextedia vs. ageas SANV | Nextedia vs. Sofina Socit Anonyme | Nextedia vs. Barco NV |
| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group SA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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