Correlation Between Television Francaise and Nexity
Can any of the company-specific risk be diversified away by investing in both Television Francaise and Nexity 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 Television Francaise and Nexity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Television Francaise 1 and Nexity, you can compare the effects of market volatilities on Television Francaise and Nexity 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 Television Francaise with a short position of Nexity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Television Francaise and Nexity.
Diversification Opportunities for Television Francaise and Nexity
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Television and Nexity is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Television Francaise 1 and Nexity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexity and Television Francaise 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 Television Francaise 1 are associated (or correlated) with Nexity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexity has no effect on the direction of Television Francaise i.e., Television Francaise and Nexity go up and down completely randomly.
Pair Corralation between Television Francaise and Nexity
Assuming the 90 days trading horizon Television Francaise 1 is expected to under-perform the Nexity. But the stock apears to be less risky and, when comparing its historical volatility, Television Francaise 1 is 2.05 times less risky than Nexity. The stock trades about -0.1 of its potential returns per unit of risk. The Nexity is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,297 in Nexity on September 1, 2024 and sell it today you would lose (131.00) from holding Nexity or give up 10.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Television Francaise 1 vs. Nexity
Performance |
| Timeline |
| Television Francaise |
| Nexity |
Television Francaise and Nexity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Television Francaise and Nexity
The main advantage of trading using opposite Television Francaise and Nexity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Television Francaise position performs unexpectedly, Nexity 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 Nexity will offset losses from the drop in Nexity's long position.| Television Francaise vs. Mtropole Tlvision SA | Television Francaise vs. Lagardere SCA | Television Francaise vs. Bouygues SA | Television Francaise vs. Publicis Groupe 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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