Correlation Between Elior SCA and Nexity
Can any of the company-specific risk be diversified away by investing in both Elior SCA 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 Elior SCA and Nexity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elior SCA and Nexity, you can compare the effects of market volatilities on Elior SCA 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 Elior SCA with a short position of Nexity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elior SCA and Nexity.
Diversification Opportunities for Elior SCA and Nexity
Very weak diversification
The 3 months correlation between Elior and Nexity is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Elior SCA and Nexity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexity and Elior SCA 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 Elior SCA 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 Elior SCA i.e., Elior SCA and Nexity go up and down completely randomly.
Pair Corralation between Elior SCA and Nexity
Assuming the 90 days trading horizon Elior SCA is expected to under-perform the Nexity. In addition to that, Elior SCA is 1.13 times more volatile than Nexity. It trades about -0.05 of its total potential returns per unit of risk. Nexity is currently generating about -0.01 per unit of volatility. If you would invest 1,297 in Nexity on September 1, 2024 and sell it today you would lose (131.00) from holding Nexity or give up 10.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elior SCA vs. Nexity
Performance |
| Timeline |
| Elior SCA |
| Nexity |
Elior SCA and Nexity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elior SCA and Nexity
The main advantage of trading using opposite Elior SCA and Nexity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elior SCA 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.| Elior SCA vs. Gaztransport Technigaz SAS | Elior SCA vs. Covivio Hotels | Elior SCA vs. Onlineformapro SA | Elior SCA vs. Broadpeak SA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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