Correlation Between Burelle SA and NRJ
Can any of the company-specific risk be diversified away by investing in both Burelle SA and NRJ 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 Burelle SA and NRJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burelle SA and NRJ Group, you can compare the effects of market volatilities on Burelle SA and NRJ 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 Burelle SA with a short position of NRJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burelle SA and NRJ.
Diversification Opportunities for Burelle SA and NRJ
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Burelle and NRJ is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Burelle SA and NRJ Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRJ Group and Burelle 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 Burelle SA are associated (or correlated) with NRJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRJ Group has no effect on the direction of Burelle SA i.e., Burelle SA and NRJ go up and down completely randomly.
Pair Corralation between Burelle SA and NRJ
Assuming the 90 days trading horizon Burelle SA is expected to under-perform the NRJ. In addition to that, Burelle SA is 1.72 times more volatile than NRJ Group. It trades about -0.03 of its total potential returns per unit of risk. NRJ Group is currently generating about -0.04 per unit of volatility. If you would invest 700.00 in NRJ Group on October 26, 2024 and sell it today you would lose (12.00) from holding NRJ Group or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burelle SA vs. NRJ Group
Performance |
| Timeline |
| Burelle SA |
| NRJ Group |
Burelle SA and NRJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burelle SA and NRJ
The main advantage of trading using opposite Burelle SA and NRJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burelle SA position performs unexpectedly, NRJ 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 NRJ will offset losses from the drop in NRJ's long position.| Burelle SA vs. Savencia SA | Burelle SA vs. Compagnie de lOdet | Burelle SA vs. Akwel SA | Burelle SA vs. Wendel |
| NRJ vs. Television Francaise 1 | NRJ vs. Mtropole Tlvision SA | NRJ vs. Haulotte Group SA | NRJ vs. VIEL Cie socit |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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