Correlation Between Worldline and Nexity
Can any of the company-specific risk be diversified away by investing in both Worldline 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 Worldline and Nexity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldline SA and Nexity, you can compare the effects of market volatilities on Worldline 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 Worldline with a short position of Nexity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldline and Nexity.
Diversification Opportunities for Worldline and Nexity
Very good diversification
The 3 months correlation between Worldline and Nexity is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Worldline SA and Nexity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexity and Worldline 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 Worldline SA 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 Worldline i.e., Worldline and Nexity go up and down completely randomly.
Pair Corralation between Worldline and Nexity
Assuming the 90 days trading horizon Worldline SA is expected to generate 1.61 times more return on investment than Nexity. However, Worldline is 1.61 times more volatile than Nexity. It trades about 0.1 of its potential returns per unit of risk. Nexity is currently generating about -0.1 per unit of risk. If you would invest 631.00 in Worldline SA on October 26, 2024 and sell it today you would earn a total of 134.00 from holding Worldline SA or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldline SA vs. Nexity
Performance |
| Timeline |
| Worldline SA |
| Nexity |
Worldline and Nexity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldline and Nexity
The main advantage of trading using opposite Worldline and Nexity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldline 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.| Worldline vs. Atos SE | Worldline vs. Teleperformance SE | Worldline vs. Dassault Systemes SE | Worldline vs. Capgemini SE |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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