Correlation Between Seche Environnem and Neotion SA
Can any of the company-specific risk be diversified away by investing in both Seche Environnem and Neotion 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 Seche Environnem and Neotion SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnem and Neotion SA, you can compare the effects of market volatilities on Seche Environnem and Neotion 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 Seche Environnem with a short position of Neotion SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnem and Neotion SA.
Diversification Opportunities for Seche Environnem and Neotion SA
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seche and Neotion is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnem and Neotion SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neotion SA and Seche Environnem 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 Seche Environnem are associated (or correlated) with Neotion SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neotion SA has no effect on the direction of Seche Environnem i.e., Seche Environnem and Neotion SA go up and down completely randomly.
Pair Corralation between Seche Environnem and Neotion SA
Assuming the 90 days trading horizon Seche Environnem is expected to generate 0.27 times more return on investment than Neotion SA. However, Seche Environnem is 3.7 times less risky than Neotion SA. It trades about 0.0 of its potential returns per unit of risk. Neotion SA is currently generating about -0.02 per unit of risk. If you would invest 8,505 in Seche Environnem on September 3, 2024 and sell it today you would lose (475.00) from holding Seche Environnem or give up 5.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Seche Environnem vs. Neotion SA
Performance |
| Timeline |
| Seche Environnem |
| Neotion SA |
Seche Environnem and Neotion SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnem and Neotion SA
The main advantage of trading using opposite Seche Environnem and Neotion SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnem position performs unexpectedly, Neotion 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 Neotion SA will offset losses from the drop in Neotion SA's long position.| Seche Environnem vs. Veolia Environnement VE | Seche Environnem vs. Derichebourg | Seche Environnem vs. Groupe Pizzorno Environnement | Seche Environnem vs. Aurea SA |
| Neotion SA vs. Invibes Advertising NV | Neotion SA vs. ISPD Network SA | Neotion SA vs. STMicroelectronics NV | Neotion SA vs. Metalliance SA |
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.
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