Correlation Between NRJ and Bourse Direct
Can any of the company-specific risk be diversified away by investing in both NRJ and Bourse Direct 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 Bourse Direct into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRJ Group and Bourse Direct SA, you can compare the effects of market volatilities on NRJ and Bourse Direct 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 Bourse Direct. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRJ and Bourse Direct.
Diversification Opportunities for NRJ and Bourse Direct
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NRJ and Bourse is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding NRJ Group and Bourse Direct SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bourse Direct SA 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 Bourse Direct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bourse Direct SA has no effect on the direction of NRJ i.e., NRJ and Bourse Direct go up and down completely randomly.
Pair Corralation between NRJ and Bourse Direct
Assuming the 90 days trading horizon NRJ is expected to generate 2.06 times less return on investment than Bourse Direct. But when comparing it to its historical volatility, NRJ Group is 1.59 times less risky than Bourse Direct. It trades about 0.03 of its potential returns per unit of risk. Bourse Direct SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 315.00 in Bourse Direct SA on August 29, 2024 and sell it today you would earn a total of 125.00 from holding Bourse Direct SA or generate 39.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRJ Group vs. Bourse Direct SA
Performance |
| Timeline |
| NRJ Group |
| Bourse Direct SA |
NRJ and Bourse Direct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRJ and Bourse Direct
The main advantage of trading using opposite NRJ and Bourse Direct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRJ position performs unexpectedly, Bourse Direct 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 Bourse Direct will offset losses from the drop in Bourse Direct's long position.| NRJ vs. Television Francaise 1 | NRJ vs. Mtropole Tlvision SA | NRJ vs. Haulotte Group SA | NRJ vs. VIEL Cie socit |
| Bourse Direct vs. BigBen Interactive | Bourse Direct vs. ABC arbitrage SA | Bourse Direct vs. CBO Territoria SA | Bourse Direct vs. Aurea 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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