Correlation Between Nacon Sa and GECI International
Can any of the company-specific risk be diversified away by investing in both Nacon Sa and GECI International 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 Nacon Sa and GECI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nacon Sa and GECI International SA, you can compare the effects of market volatilities on Nacon Sa and GECI International 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 Nacon Sa with a short position of GECI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nacon Sa and GECI International.
Diversification Opportunities for Nacon Sa and GECI International
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nacon and GECI is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nacon Sa and GECI International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GECI International and Nacon 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 Nacon Sa are associated (or correlated) with GECI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GECI International has no effect on the direction of Nacon Sa i.e., Nacon Sa and GECI International go up and down completely randomly.
Pair Corralation between Nacon Sa and GECI International
Assuming the 90 days trading horizon Nacon Sa is expected to under-perform the GECI International. But the stock apears to be less risky and, when comparing its historical volatility, Nacon Sa is 1.18 times less risky than GECI International. The stock trades about -0.27 of its potential returns per unit of risk. The GECI International SA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 403.00 in GECI International SA on September 3, 2024 and sell it today you would lose (139.00) from holding GECI International SA or give up 34.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nacon Sa vs. GECI International SA
Performance |
| Timeline |
| Nacon Sa |
| GECI International |
Nacon Sa and GECI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nacon Sa and GECI International
The main advantage of trading using opposite Nacon Sa and GECI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nacon Sa position performs unexpectedly, GECI International 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 GECI International will offset losses from the drop in GECI International's long position.| Nacon Sa vs. BigBen Interactive | Nacon Sa vs. Neoen SA | Nacon Sa vs. Solutions 30 SE | Nacon Sa vs. Voltalia SA |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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