Correlation Between NRJ and Mtropole Tlvision
Can any of the company-specific risk be diversified away by investing in both NRJ and Mtropole Tlvision 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 Mtropole Tlvision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRJ Group and Mtropole Tlvision SA, you can compare the effects of market volatilities on NRJ and Mtropole Tlvision 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 Mtropole Tlvision. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRJ and Mtropole Tlvision.
Diversification Opportunities for NRJ and Mtropole Tlvision
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NRJ and Mtropole is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding NRJ Group and Mtropole Tlvision SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mtropole Tlvision 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 Mtropole Tlvision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mtropole Tlvision has no effect on the direction of NRJ i.e., NRJ and Mtropole Tlvision go up and down completely randomly.
Pair Corralation between NRJ and Mtropole Tlvision
Assuming the 90 days trading horizon NRJ Group is expected to generate 1.1 times more return on investment than Mtropole Tlvision. However, NRJ is 1.1 times more volatile than Mtropole Tlvision SA. It trades about -0.02 of its potential returns per unit of risk. Mtropole Tlvision SA is currently generating about -0.09 per unit of risk. If you would invest 739.00 in NRJ Group on September 3, 2024 and sell it today you would lose (43.00) from holding NRJ Group or give up 5.82% 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. Mtropole Tlvision SA
Performance |
| Timeline |
| NRJ Group |
| Mtropole Tlvision |
NRJ and Mtropole Tlvision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRJ and Mtropole Tlvision
The main advantage of trading using opposite NRJ and Mtropole Tlvision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRJ position performs unexpectedly, Mtropole Tlvision 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 Mtropole Tlvision will offset losses from the drop in Mtropole Tlvision's long position.| NRJ vs. Television Francaise 1 | NRJ vs. Mtropole Tlvision SA | NRJ vs. Haulotte Group SA | NRJ vs. VIEL Cie socit |
| Mtropole Tlvision vs. Television Francaise 1 | Mtropole Tlvision vs. Nexity | Mtropole Tlvision vs. Lagardere SCA | Mtropole Tlvision vs. Eutelsat Communications 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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