Correlation Between Groupe CRIT and Neurones
Can any of the company-specific risk be diversified away by investing in both Groupe CRIT and Neurones 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 Groupe CRIT and Neurones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe CRIT SA and Neurones, you can compare the effects of market volatilities on Groupe CRIT and Neurones 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 Groupe CRIT with a short position of Neurones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe CRIT and Neurones.
Diversification Opportunities for Groupe CRIT and Neurones
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Groupe and Neurones is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Groupe CRIT SA and Neurones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neurones and Groupe CRIT 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 Groupe CRIT SA are associated (or correlated) with Neurones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neurones has no effect on the direction of Groupe CRIT i.e., Groupe CRIT and Neurones go up and down completely randomly.
Pair Corralation between Groupe CRIT and Neurones
Assuming the 90 days trading horizon Groupe CRIT is expected to generate 1.93 times less return on investment than Neurones. In addition to that, Groupe CRIT is 1.04 times more volatile than Neurones. It trades about 0.02 of its total potential returns per unit of risk. Neurones is currently generating about 0.04 per unit of volatility. If you would invest 3,540 in Neurones on September 5, 2024 and sell it today you would earn a total of 980.00 from holding Neurones or generate 27.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupe CRIT SA vs. Neurones
Performance |
| Timeline |
| Groupe CRIT SA |
| Neurones |
Groupe CRIT and Neurones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe CRIT and Neurones
The main advantage of trading using opposite Groupe CRIT and Neurones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe CRIT position performs unexpectedly, Neurones 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 Neurones will offset losses from the drop in Neurones' long position.| Groupe CRIT vs. Synergie SE | Groupe CRIT vs. Alten SA | Groupe CRIT vs. Manitou BF SA | Groupe CRIT vs. Linedata Services SA |
| Neurones vs. Melexis NV | Neurones vs. ageas SANV | Neurones vs. Sofina Socit Anonyme | Neurones vs. Barco NV |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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