Correlation Between Nexity and Maisons Du
Can any of the company-specific risk be diversified away by investing in both Nexity and Maisons Du 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 Maisons Du into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexity and Maisons du Monde, you can compare the effects of market volatilities on Nexity and Maisons Du 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 Maisons Du. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexity and Maisons Du.
Diversification Opportunities for Nexity and Maisons Du
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexity and Maisons is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nexity and Maisons du Monde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maisons du Monde 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 Maisons Du. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maisons du Monde has no effect on the direction of Nexity i.e., Nexity and Maisons Du go up and down completely randomly.
Pair Corralation between Nexity and Maisons Du
Assuming the 90 days trading horizon Nexity is expected to generate 0.94 times more return on investment than Maisons Du. However, Nexity is 1.06 times less risky than Maisons Du. It trades about -0.03 of its potential returns per unit of risk. Maisons du Monde is currently generating about -0.06 per unit of risk. If you would invest 2,251 in Nexity on August 30, 2024 and sell it today you would lose (1,016) from holding Nexity or give up 45.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexity vs. Maisons du Monde
Performance |
| Timeline |
| Nexity |
| Maisons du Monde |
Nexity and Maisons Du Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexity and Maisons Du
The main advantage of trading using opposite Nexity and Maisons Du positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexity position performs unexpectedly, Maisons Du 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 Maisons Du will offset losses from the drop in Maisons Du's long position.The idea behind Nexity and Maisons du Monde 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.| Maisons Du vs. Fnac Darty SA | Maisons Du vs. Trigano SA | Maisons Du vs. Elis SA | Maisons Du vs. Derichebourg |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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