Correlation Between BigBen Interactive and Neoen SA
Can any of the company-specific risk be diversified away by investing in both BigBen Interactive and Neoen SA 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 BigBen Interactive and Neoen SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BigBen Interactive and Neoen SA, you can compare the effects of market volatilities on BigBen Interactive and Neoen SA 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 BigBen Interactive with a short position of Neoen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBen Interactive and Neoen SA.
Diversification Opportunities for BigBen Interactive and Neoen SA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BigBen and Neoen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BigBen Interactive and Neoen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neoen SA and BigBen Interactive 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 BigBen Interactive are associated (or correlated) with Neoen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neoen SA has no effect on the direction of BigBen Interactive i.e., BigBen Interactive and Neoen SA go up and down completely randomly.
Pair Corralation between BigBen Interactive and Neoen SA
Assuming the 90 days trading horizon BigBen Interactive is expected to under-perform the Neoen SA. In addition to that, BigBen Interactive is 12.57 times more volatile than Neoen SA. It trades about -0.81 of its total potential returns per unit of risk. Neoen SA is currently generating about 0.08 per unit of volatility. If you would invest 3,945 in Neoen SA on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Neoen SA or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BigBen Interactive vs. Neoen SA
Performance |
| Timeline |
| BigBen Interactive |
| Neoen SA |
BigBen Interactive and Neoen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BigBen Interactive and Neoen SA
The main advantage of trading using opposite BigBen Interactive and Neoen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBen Interactive position performs unexpectedly, Neoen SA 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 Neoen SA will offset losses from the drop in Neoen SA's long position.| BigBen Interactive vs. Nacon Sa | BigBen Interactive vs. Chargeurs SA | BigBen Interactive vs. Claranova SE | BigBen Interactive vs. Trigano SA |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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