Correlation Between Noble Financials and Comp SA
Can any of the company-specific risk be diversified away by investing in both Noble Financials and Comp SA 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 Noble Financials and Comp SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble Financials SA and Comp SA, you can compare the effects of market volatilities on Noble Financials and Comp SA 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 Noble Financials with a short position of Comp SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Financials and Comp SA.
Diversification Opportunities for Noble Financials and Comp SA
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Noble and Comp is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Noble Financials SA and Comp SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comp SA and Noble Financials 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 Noble Financials SA are associated (or correlated) with Comp SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comp SA has no effect on the direction of Noble Financials i.e., Noble Financials and Comp SA go up and down completely randomly.
Pair Corralation between Noble Financials and Comp SA
Assuming the 90 days trading horizon Noble Financials SA is expected to under-perform the Comp SA. In addition to that, Noble Financials is 2.15 times more volatile than Comp SA. It trades about -0.02 of its total potential returns per unit of risk. Comp SA is currently generating about 0.07 per unit of volatility. If you would invest 10,350 in Comp SA on September 1, 2024 and sell it today you would earn a total of 1,500 from holding Comp SA or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Noble Financials SA vs. Comp SA
Performance |
| Timeline |
| Noble Financials |
| Comp SA |
Noble Financials and Comp SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Financials and Comp SA
The main advantage of trading using opposite Noble Financials and Comp SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Financials position performs unexpectedly, Comp SA 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 Comp SA will offset losses from the drop in Comp SA's long position.| Noble Financials vs. MLP Group SA | Noble Financials vs. Esotiq Henderson SA | Noble Financials vs. Echo Investment SA |
| Comp SA vs. Asseco Business Solutions | Comp SA vs. Detalion Games SA | Comp SA vs. Asseco South Eastern | Comp SA vs. CFI Holding 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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