Correlation Between Nexans SA and Etablissements Maurel
Can any of the company-specific risk be diversified away by investing in both Nexans SA and Etablissements Maurel 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 Nexans SA and Etablissements Maurel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexans SA and Etablissements Maurel et, you can compare the effects of market volatilities on Nexans SA and Etablissements Maurel 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 Nexans SA with a short position of Etablissements Maurel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexans SA and Etablissements Maurel.
Diversification Opportunities for Nexans SA and Etablissements Maurel
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nexans and Etablissements is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nexans SA and Etablissements Maurel et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etablissements Maurel and Nexans 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 Nexans SA are associated (or correlated) with Etablissements Maurel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etablissements Maurel has no effect on the direction of Nexans SA i.e., Nexans SA and Etablissements Maurel go up and down completely randomly.
Pair Corralation between Nexans SA and Etablissements Maurel
Assuming the 90 days trading horizon Nexans SA is expected to generate 4.32 times less return on investment than Etablissements Maurel. But when comparing it to its historical volatility, Nexans SA is 1.17 times less risky than Etablissements Maurel. It trades about 0.02 of its potential returns per unit of risk. Etablissements Maurel et is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 335.00 in Etablissements Maurel et on November 1, 2024 and sell it today you would earn a total of 277.00 from holding Etablissements Maurel et or generate 82.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexans SA vs. Etablissements Maurel et
Performance |
| Timeline |
| Nexans SA |
| Etablissements Maurel |
Nexans SA and Etablissements Maurel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexans SA and Etablissements Maurel
The main advantage of trading using opposite Nexans SA and Etablissements Maurel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexans SA position performs unexpectedly, Etablissements Maurel 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 Etablissements Maurel will offset losses from the drop in Etablissements Maurel's long position.The idea behind Nexans SA and Etablissements Maurel et pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Etablissements Maurel vs. Vallourec | Etablissements Maurel vs. Eramet SA | Etablissements Maurel vs. Soitec SA | Etablissements Maurel vs. Nexans 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |