Correlation Between Nexity and Caisse Regionale
Can any of the company-specific risk be diversified away by investing in both Nexity and Caisse Regionale 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 Nexity and Caisse Regionale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexity and Caisse Regionale de, you can compare the effects of market volatilities on Nexity and Caisse Regionale 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 Nexity with a short position of Caisse Regionale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexity and Caisse Regionale.
Diversification Opportunities for Nexity and Caisse Regionale
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexity and Caisse is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nexity and Caisse Regionale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caisse Regionale and Nexity 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 Nexity are associated (or correlated) with Caisse Regionale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caisse Regionale has no effect on the direction of Nexity i.e., Nexity and Caisse Regionale go up and down completely randomly.
Pair Corralation between Nexity and Caisse Regionale
Assuming the 90 days trading horizon Nexity is expected to under-perform the Caisse Regionale. In addition to that, Nexity is 2.91 times more volatile than Caisse Regionale de. It trades about -0.05 of its total potential returns per unit of risk. Caisse Regionale de is currently generating about 0.13 per unit of volatility. If you would invest 1,781 in Caisse Regionale de on August 24, 2024 and sell it today you would earn a total of 44.00 from holding Caisse Regionale de or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexity vs. Caisse Regionale de
Performance |
| Timeline |
| Nexity |
| Caisse Regionale |
Nexity and Caisse Regionale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexity and Caisse Regionale
The main advantage of trading using opposite Nexity and Caisse Regionale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexity position performs unexpectedly, Caisse Regionale 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 Caisse Regionale will offset losses from the drop in Caisse Regionale's long position.The idea behind Nexity and Caisse Regionale de pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Caisse Regionale vs. Nexity | Caisse Regionale vs. SCOR SE | Caisse Regionale vs. Eutelsat Communications SA | Caisse Regionale vs. Rubis 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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