Correlation Between NRJ and BIO UV
Can any of the company-specific risk be diversified away by investing in both NRJ and BIO UV 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 NRJ and BIO UV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRJ Group and BIO UV Group, you can compare the effects of market volatilities on NRJ and BIO UV 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 NRJ with a short position of BIO UV. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRJ and BIO UV.
Diversification Opportunities for NRJ and BIO UV
Very poor diversification
The 3 months correlation between NRJ and BIO is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding NRJ Group and BIO UV Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO UV Group and NRJ 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 NRJ Group are associated (or correlated) with BIO UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO UV Group has no effect on the direction of NRJ i.e., NRJ and BIO UV go up and down completely randomly.
Pair Corralation between NRJ and BIO UV
Assuming the 90 days trading horizon NRJ Group is expected to generate 0.32 times more return on investment than BIO UV. However, NRJ Group is 3.14 times less risky than BIO UV. It trades about -0.34 of its potential returns per unit of risk. BIO UV Group is currently generating about -0.15 per unit of risk. If you would invest 748.00 in NRJ Group on September 1, 2024 and sell it today you would lose (52.00) from holding NRJ Group or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRJ Group vs. BIO UV Group
Performance |
| Timeline |
| NRJ Group |
| BIO UV Group |
NRJ and BIO UV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRJ and BIO UV
The main advantage of trading using opposite NRJ and BIO UV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRJ position performs unexpectedly, BIO UV 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 BIO UV will offset losses from the drop in BIO UV's long position.| NRJ vs. Television Francaise 1 | NRJ vs. Mtropole Tlvision SA | NRJ vs. Haulotte Group SA | NRJ vs. VIEL Cie socit |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |