Correlation Between Neoen SA and Voltalia
Can any of the company-specific risk be diversified away by investing in both Neoen SA and Voltalia 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 Voltalia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neoen SA and Voltalia SA, you can compare the effects of market volatilities on Neoen SA and Voltalia 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 Voltalia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neoen SA and Voltalia.
Diversification Opportunities for Neoen SA and Voltalia
Excellent diversification
The 3 months correlation between Neoen and Voltalia is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Neoen SA and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia SA 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 Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of Neoen SA i.e., Neoen SA and Voltalia go up and down completely randomly.
Pair Corralation between Neoen SA and Voltalia
Assuming the 90 days trading horizon Neoen SA is expected to generate 0.06 times more return on investment than Voltalia. However, Neoen SA is 16.65 times less risky than Voltalia. It trades about 0.14 of its potential returns per unit of risk. Voltalia SA is currently generating about 0.0 per unit of risk. If you would invest 3,868 in Neoen SA on November 2, 2024 and sell it today you would earn a total of 106.00 from holding Neoen SA or generate 2.74% 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. Voltalia SA
Performance |
| Timeline |
| Neoen SA |
| Voltalia SA |
Neoen SA and Voltalia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neoen SA and Voltalia
The main advantage of trading using opposite Neoen SA and Voltalia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neoen SA position performs unexpectedly, Voltalia 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 Voltalia will offset losses from the drop in Voltalia's long position.| Neoen SA vs. Gaztransport Technigaz SAS | Neoen SA vs. Carbios | Neoen SA vs. Manitou BF SA | Neoen SA vs. Ossiam Minimum Variance |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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