Correlation Between NRJ and Societe De
Can any of the company-specific risk be diversified away by investing in both NRJ and Societe De 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 Societe De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRJ Group and Societe de la, you can compare the effects of market volatilities on NRJ and Societe De 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 Societe De. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRJ and Societe De.
Diversification Opportunities for NRJ and Societe De
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NRJ and Societe is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding NRJ Group and Societe de la in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Societe de la 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 Societe De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Societe de la has no effect on the direction of NRJ i.e., NRJ and Societe De go up and down completely randomly.
Pair Corralation between NRJ and Societe De
Assuming the 90 days trading horizon NRJ Group is expected to generate 0.55 times more return on investment than Societe De. However, NRJ Group is 1.82 times less risky than Societe De. It trades about -0.06 of its potential returns per unit of risk. Societe de la is currently generating about -0.29 per unit of risk. If you would invest 790.00 in NRJ Group on August 31, 2024 and sell it today you would lose (94.00) from holding NRJ Group or give up 11.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRJ Group vs. Societe de la
Performance |
| Timeline |
| NRJ Group |
| Societe de la |
NRJ and Societe De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRJ and Societe De
The main advantage of trading using opposite NRJ and Societe De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRJ position performs unexpectedly, Societe De 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 Societe De will offset losses from the drop in Societe De's long position.| NRJ vs. Television Francaise 1 | NRJ vs. Mtropole Tlvision SA | NRJ vs. Haulotte Group SA | NRJ vs. VIEL Cie socit |
| Societe De vs. Mercialys SA | Societe De vs. Icade SA | Societe De vs. Gecina SA | Societe De vs. Altarea SCA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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