Correlation Between Nextedia and Groupe Sfpi
Can any of the company-specific risk be diversified away by investing in both Nextedia 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 Nextedia and Groupe Sfpi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextedia and Groupe Sfpi, you can compare the effects of market volatilities on Nextedia 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 Nextedia with a short position of Groupe Sfpi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextedia and Groupe Sfpi.
Diversification Opportunities for Nextedia and Groupe Sfpi
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nextedia and Groupe is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nextedia and Groupe Sfpi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Sfpi 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 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 Nextedia i.e., Nextedia and Groupe Sfpi go up and down completely randomly.
Pair Corralation between Nextedia and Groupe Sfpi
Assuming the 90 days trading horizon Nextedia is expected to under-perform the Groupe Sfpi. In addition to that, Nextedia is 1.29 times more volatile than Groupe Sfpi. It trades about -0.03 of its total potential returns per unit of risk. Groupe Sfpi is currently generating about 0.01 per unit of volatility. If you would invest 205.00 in Groupe Sfpi on September 3, 2024 and sell it today you would lose (12.00) from holding Groupe Sfpi or give up 5.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextedia vs. Groupe Sfpi
Performance |
| Timeline |
| Nextedia |
| Groupe Sfpi |
Nextedia and Groupe Sfpi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextedia and Groupe Sfpi
The main advantage of trading using opposite Nextedia and Groupe Sfpi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextedia 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.| Nextedia vs. Melexis NV | Nextedia vs. ageas SANV | Nextedia vs. Sofina Socit Anonyme | Nextedia vs. Barco NV |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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