Correlation Between NEXANS ADR and Corsair Gaming
Can any of the company-specific risk be diversified away by investing in both NEXANS ADR and Corsair Gaming 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 ADR and Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXANS ADR EO and Corsair Gaming, you can compare the effects of market volatilities on NEXANS ADR and Corsair Gaming 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 ADR with a short position of Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXANS ADR and Corsair Gaming.
Diversification Opportunities for NEXANS ADR and Corsair Gaming
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEXANS and Corsair is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding NEXANS ADR EO and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming and NEXANS ADR 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 ADR EO are associated (or correlated) with Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of NEXANS ADR i.e., NEXANS ADR and Corsair Gaming go up and down completely randomly.
Pair Corralation between NEXANS ADR and Corsair Gaming
Assuming the 90 days trading horizon NEXANS ADR EO is expected to under-perform the Corsair Gaming. But the stock apears to be less risky and, when comparing its historical volatility, NEXANS ADR EO is 1.25 times less risky than Corsair Gaming. The stock trades about -0.12 of its potential returns per unit of risk. The Corsair Gaming is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 620.00 in Corsair Gaming on October 24, 2024 and sell it today you would earn a total of 221.00 from holding Corsair Gaming or generate 35.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXANS ADR EO vs. Corsair Gaming
Performance |
| Timeline |
| NEXANS ADR EO |
| Corsair Gaming |
NEXANS ADR and Corsair Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXANS ADR and Corsair Gaming
The main advantage of trading using opposite NEXANS ADR and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXANS ADR position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.| NEXANS ADR vs. COMBA TELECOM SYST | NEXANS ADR vs. FARM 51 GROUP | NEXANS ADR vs. Singapore Telecommunications Limited | NEXANS ADR vs. Penta Ocean Construction Co |
| Corsair Gaming vs. MOLSON RS BEVERAGE | Corsair Gaming vs. Quaker Chemical | Corsair Gaming vs. THAI BEVERAGE | Corsair Gaming vs. CHEMICAL INDUSTRIES |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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