Correlation Between Neoen SA and Aramis SAS
Can any of the company-specific risk be diversified away by investing in both Neoen SA and Aramis SAS 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 Neoen SA and Aramis SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neoen SA and Aramis SAS, you can compare the effects of market volatilities on Neoen SA and Aramis SAS 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 Neoen SA with a short position of Aramis SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neoen SA and Aramis SAS.
Diversification Opportunities for Neoen SA and Aramis SAS
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Neoen and Aramis is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Neoen SA and Aramis SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aramis SAS and Neoen 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 Neoen SA are associated (or correlated) with Aramis SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aramis SAS has no effect on the direction of Neoen SA i.e., Neoen SA and Aramis SAS go up and down completely randomly.
Pair Corralation between Neoen SA and Aramis SAS
Assuming the 90 days trading horizon Neoen SA is expected to generate 4850.0 times less return on investment than Aramis SAS. But when comparing it to its historical volatility, Neoen SA is 13.37 times less risky than Aramis SAS. It trades about 0.0 of its potential returns per unit of risk. Aramis SAS is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 635.00 in Aramis SAS on September 12, 2024 and sell it today you would earn a total of 146.00 from holding Aramis SAS or generate 22.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neoen SA vs. Aramis SAS
Performance |
| Timeline |
| Neoen SA |
| Aramis SAS |
Neoen SA and Aramis SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neoen SA and Aramis SAS
The main advantage of trading using opposite Neoen SA and Aramis SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neoen SA position performs unexpectedly, Aramis SAS 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 Aramis SAS will offset losses from the drop in Aramis SAS's long position.| Neoen SA vs. Voltalia SA | Neoen SA vs. Gaztransport Technigaz SAS | Neoen SA vs. Worldline SA | Neoen SA vs. Rubis SCA |
| Aramis SAS vs. LVMH Mot Hennessy | Aramis SAS vs. LOreal SA | Aramis SAS vs. Hermes International SCA | Aramis SAS vs. Manitou BF 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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