Correlation Between Fnac Darty and Cnova NV
Can any of the company-specific risk be diversified away by investing in both Fnac Darty and Cnova NV 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 Fnac Darty and Cnova NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fnac Darty SA and Cnova NV, you can compare the effects of market volatilities on Fnac Darty and Cnova NV 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 Fnac Darty with a short position of Cnova NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fnac Darty and Cnova NV.
Diversification Opportunities for Fnac Darty and Cnova NV
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fnac and Cnova is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Fnac Darty SA and Cnova NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cnova NV and Fnac Darty 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 Fnac Darty SA are associated (or correlated) with Cnova NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cnova NV has no effect on the direction of Fnac Darty i.e., Fnac Darty and Cnova NV go up and down completely randomly.
Pair Corralation between Fnac Darty and Cnova NV
Assuming the 90 days trading horizon Fnac Darty SA is expected to under-perform the Cnova NV. But the stock apears to be less risky and, when comparing its historical volatility, Fnac Darty SA is 6.66 times less risky than Cnova NV. The stock trades about -0.06 of its potential returns per unit of risk. The Cnova NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 226.00 in Cnova NV on September 1, 2024 and sell it today you would lose (146.00) from holding Cnova NV or give up 64.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Fnac Darty SA vs. Cnova NV
Performance |
| Timeline |
| Fnac Darty SA |
| Cnova NV |
Fnac Darty and Cnova NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fnac Darty and Cnova NV
The main advantage of trading using opposite Fnac Darty and Cnova NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fnac Darty position performs unexpectedly, Cnova NV 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 Cnova NV will offset losses from the drop in Cnova NV's long position.| Fnac Darty vs. Vente Unique | Fnac Darty vs. Groupe Sfpi | Fnac Darty vs. Cegedim SA | Fnac Darty vs. SA Catana Group |
| Cnova NV vs. Casino Guichard Perrachon | Cnova NV vs. Rallye SA | Cnova NV vs. Carmila SA | Cnova NV vs. Burelle 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 CEOs Directory module to screen CEOs from public companies around the world.
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