Correlation Between OVH Groupe and Neoen SA
Can any of the company-specific risk be diversified away by investing in both OVH Groupe and Neoen SA 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 OVH Groupe and Neoen SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OVH Groupe SAS and Neoen SA, you can compare the effects of market volatilities on OVH Groupe and Neoen SA 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 OVH Groupe with a short position of Neoen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of OVH Groupe and Neoen SA.
Diversification Opportunities for OVH Groupe and Neoen SA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OVH and Neoen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding OVH Groupe SAS and Neoen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neoen SA and OVH Groupe 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 OVH Groupe SAS are associated (or correlated) with Neoen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neoen SA has no effect on the direction of OVH Groupe i.e., OVH Groupe and Neoen SA go up and down completely randomly.
Pair Corralation between OVH Groupe and Neoen SA
Assuming the 90 days trading horizon OVH Groupe SAS is expected to under-perform the Neoen SA. In addition to that, OVH Groupe is 18.0 times more volatile than Neoen SA. It trades about -0.19 of its total potential returns per unit of risk. Neoen SA is currently generating about 0.19 per unit of volatility. If you would invest 3,972 in Neoen SA on November 28, 2024 and sell it today you would earn a total of 16.00 from holding Neoen SA or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OVH Groupe SAS vs. Neoen SA
Performance |
| Timeline |
| OVH Groupe SAS |
| Neoen SA |
OVH Groupe and Neoen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OVH Groupe and Neoen SA
The main advantage of trading using opposite OVH Groupe and Neoen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OVH Groupe position performs unexpectedly, Neoen SA 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 Neoen SA will offset losses from the drop in Neoen SA's long position.| OVH Groupe vs. La Francaise Des | OVH Groupe vs. TotalEnergies SE | OVH Groupe vs. Worldline SA | OVH Groupe vs. Atos SE |
| Neoen SA vs. Voltalia SA | Neoen SA vs. Gaztransport Technigaz SAS | Neoen SA vs. Worldline SA | Neoen SA 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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