Correlation Between Neoen SA and Believe SAS
Can any of the company-specific risk be diversified away by investing in both Neoen SA and Believe 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 Believe 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 Believe SAS, you can compare the effects of market volatilities on Neoen SA and Believe 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 Believe SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neoen SA and Believe SAS.
Diversification Opportunities for Neoen SA and Believe SAS
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neoen and Believe is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Neoen SA and Believe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Believe 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 Believe SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Believe SAS has no effect on the direction of Neoen SA i.e., Neoen SA and Believe SAS go up and down completely randomly.
Pair Corralation between Neoen SA and Believe SAS
Assuming the 90 days trading horizon Neoen SA is expected to generate 0.93 times more return on investment than Believe SAS. However, Neoen SA is 1.07 times less risky than Believe SAS. It trades about 0.11 of its potential returns per unit of risk. Believe SAS is currently generating about -0.01 per unit of risk. If you would invest 2,973 in Neoen SA on September 3, 2024 and sell it today you would earn a total of 981.00 from holding Neoen SA or generate 33.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neoen SA vs. Believe SAS
Performance |
| Timeline |
| Neoen SA |
| Believe SAS |
Neoen SA and Believe SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neoen SA and Believe SAS
The main advantage of trading using opposite Neoen SA and Believe SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neoen SA position performs unexpectedly, Believe 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 Believe SAS will offset losses from the drop in Believe 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 |
| Believe SAS vs. OVH Groupe SAS | Believe SAS vs. Aramis SAS | Believe SAS vs. Neoen SA | Believe SAS vs. Technip Energies BV |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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