Correlation Between Gaumont SA and NRJ
Can any of the company-specific risk be diversified away by investing in both Gaumont 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 Gaumont SA and NRJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaumont SA and NRJ Group, you can compare the effects of market volatilities on Gaumont 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 Gaumont SA with a short position of NRJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaumont SA and NRJ.
Diversification Opportunities for Gaumont SA and NRJ
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaumont and NRJ is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gaumont SA and NRJ Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRJ Group and Gaumont 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 Gaumont 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 Gaumont SA i.e., Gaumont SA and NRJ go up and down completely randomly.
Pair Corralation between Gaumont SA and NRJ
Assuming the 90 days trading horizon Gaumont SA is expected to under-perform the NRJ. But the stock apears to be less risky and, when comparing its historical volatility, Gaumont SA is 1.07 times less risky than NRJ. The stock trades about -0.02 of its potential returns per unit of risk. The NRJ Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 649.00 in NRJ Group on August 26, 2024 and sell it today you would earn a total of 49.00 from holding NRJ Group or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaumont SA vs. NRJ Group
Performance |
| Timeline |
| Gaumont SA |
| NRJ Group |
Gaumont SA and NRJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaumont SA and NRJ
The main advantage of trading using opposite Gaumont SA and NRJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaumont 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.| Gaumont SA vs. NRJ Group | Gaumont SA vs. Groupe Partouche SA | Gaumont SA vs. Passat Socit Anonyme | Gaumont SA vs. Jacques Bogart SA |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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