Correlation Between Coface SA and Nexity
Can any of the company-specific risk be diversified away by investing in both Coface SA and Nexity 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 Coface SA and Nexity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coface SA and Nexity, you can compare the effects of market volatilities on Coface SA and Nexity 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 Coface SA with a short position of Nexity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coface SA and Nexity.
Diversification Opportunities for Coface SA and Nexity
Very weak diversification
The 3 months correlation between Coface and Nexity is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Coface SA and Nexity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexity and Coface 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 Coface SA are associated (or correlated) with Nexity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexity has no effect on the direction of Coface SA i.e., Coface SA and Nexity go up and down completely randomly.
Pair Corralation between Coface SA and Nexity
Assuming the 90 days trading horizon Coface SA is expected to generate 0.51 times more return on investment than Nexity. However, Coface SA is 1.96 times less risky than Nexity. It trades about 0.07 of its potential returns per unit of risk. Nexity is currently generating about -0.03 per unit of risk. If you would invest 943.00 in Coface SA on August 26, 2024 and sell it today you would earn a total of 537.00 from holding Coface SA or generate 56.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coface SA vs. Nexity
Performance |
| Timeline |
| Coface SA |
| Nexity |
Coface SA and Nexity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coface SA and Nexity
The main advantage of trading using opposite Coface SA and Nexity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coface SA position performs unexpectedly, Nexity 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 Nexity will offset losses from the drop in Nexity's long position.| Coface SA vs. Caisse rgionale de | Coface SA vs. Caisse Regionale de | Coface SA vs. Manitou BF SA | Coface SA vs. Ossiam Minimum Variance |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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