Correlation Between Neoen SA and Visteon Corp
Can any of the company-specific risk be diversified away by investing in both Neoen SA and Visteon Corp 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 Visteon Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neoen SA and Visteon Corp, you can compare the effects of market volatilities on Neoen SA and Visteon Corp 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 Visteon Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neoen SA and Visteon Corp.
Diversification Opportunities for Neoen SA and Visteon Corp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Neoen and Visteon is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Neoen SA and Visteon Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visteon Corp 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 Visteon Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visteon Corp has no effect on the direction of Neoen SA i.e., Neoen SA and Visteon Corp go up and down completely randomly.
Pair Corralation between Neoen SA and Visteon Corp
Assuming the 90 days horizon Neoen SA is expected to generate 0.48 times more return on investment than Visteon Corp. However, Neoen SA is 2.07 times less risky than Visteon Corp. It trades about 0.02 of its potential returns per unit of risk. Visteon Corp is currently generating about -0.03 per unit of risk. If you would invest 3,863 in Neoen SA on August 30, 2024 and sell it today you would earn a total of 337.00 from holding Neoen SA or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neoen SA vs. Visteon Corp
Performance |
| Timeline |
| Neoen SA |
| Visteon Corp |
Neoen SA and Visteon Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neoen SA and Visteon Corp
The main advantage of trading using opposite Neoen SA and Visteon Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neoen SA position performs unexpectedly, Visteon Corp 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 Visteon Corp will offset losses from the drop in Visteon Corp's long position.| Neoen SA vs. Visteon Corp | Neoen SA vs. Inflection Point Acquisition | Neoen SA vs. Adient PLC | Neoen SA vs. Small Cap Premium |
| Visteon Corp vs. Gentex | Visteon Corp vs. Adient PLC | Visteon Corp vs. Autoliv | Visteon Corp vs. Fox Factory Holding |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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