Correlation Between Nexity and Fnac Darty
Can any of the company-specific risk be diversified away by investing in both Nexity and Fnac Darty 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 Fnac Darty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexity and Fnac Darty SA, you can compare the effects of market volatilities on Nexity and Fnac Darty 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 Fnac Darty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexity and Fnac Darty.
Diversification Opportunities for Nexity and Fnac Darty
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nexity and Fnac is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nexity and Fnac Darty SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fnac Darty SA 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 Fnac Darty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fnac Darty SA has no effect on the direction of Nexity i.e., Nexity and Fnac Darty go up and down completely randomly.
Pair Corralation between Nexity and Fnac Darty
Assuming the 90 days trading horizon Nexity is expected to under-perform the Fnac Darty. In addition to that, Nexity is 1.2 times more volatile than Fnac Darty SA. It trades about -0.15 of its total potential returns per unit of risk. Fnac Darty SA is currently generating about 0.02 per unit of volatility. If you would invest 2,675 in Fnac Darty SA on August 26, 2024 and sell it today you would earn a total of 10.00 from holding Fnac Darty SA or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexity vs. Fnac Darty SA
Performance |
| Timeline |
| Nexity |
| Fnac Darty SA |
Nexity and Fnac Darty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexity and Fnac Darty
The main advantage of trading using opposite Nexity and Fnac Darty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexity position performs unexpectedly, Fnac Darty 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 Fnac Darty will offset losses from the drop in Fnac Darty's long position.The idea behind Nexity and Fnac Darty SA 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.| Fnac Darty vs. Maisons du Monde | Fnac Darty vs. Television Francaise 1 | Fnac Darty vs. Nexity | Fnac Darty vs. Elior 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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