Correlation Between Nexans SA and AFC Energy
Can any of the company-specific risk be diversified away by investing in both Nexans SA and AFC Energy 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 Nexans SA and AFC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexans SA and AFC Energy plc, you can compare the effects of market volatilities on Nexans SA and AFC Energy 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 Nexans SA with a short position of AFC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexans SA and AFC Energy.
Diversification Opportunities for Nexans SA and AFC Energy
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nexans and AFC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nexans SA and AFC Energy plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Energy plc and Nexans SA 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 Nexans SA are associated (or correlated) with AFC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Energy plc has no effect on the direction of Nexans SA i.e., Nexans SA and AFC Energy go up and down completely randomly.
Pair Corralation between Nexans SA and AFC Energy
Assuming the 90 days horizon Nexans SA is expected to generate 0.51 times more return on investment than AFC Energy. However, Nexans SA is 1.96 times less risky than AFC Energy. It trades about 0.12 of its potential returns per unit of risk. AFC Energy plc is currently generating about -0.17 per unit of risk. If you would invest 9,677 in Nexans SA on December 1, 2024 and sell it today you would earn a total of 713.00 from holding Nexans SA or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexans SA vs. AFC Energy plc
Performance |
| Timeline |
| Nexans SA |
| AFC Energy plc |
Nexans SA and AFC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexans SA and AFC Energy
The main advantage of trading using opposite Nexans SA and AFC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexans SA position performs unexpectedly, AFC Energy 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 AFC Energy will offset losses from the drop in AFC Energy's long position.| Nexans SA vs. Novonix | Nexans SA vs. Novonix Ltd ADR | Nexans SA vs. China Carbon Graphit | Nexans SA vs. Flux Power Holdings |
| AFC Energy vs. Legrand SA ADR | AFC Energy vs. Loop Energy | AFC Energy vs. Sunrise New Energy | AFC Energy vs. Alfen NV |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |