Correlation Between Nacon Sa and FNP Technologies

Can any of the company-specific risk be diversified away by investing in both Nacon Sa and FNP Technologies 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 Nacon Sa and FNP Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nacon Sa and FNP Technologies SA, you can compare the effects of market volatilities on Nacon Sa and FNP Technologies 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 Nacon Sa with a short position of FNP Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nacon Sa and FNP Technologies.

Diversification Opportunities for Nacon Sa and FNP Technologies

0.0

Correlation Coefficient

Nacon Sa  FNP Technologies

Pay attention - limited upside

The 3 months correlation between Nacon and FNP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nacon Sa and FNP Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNP Technologies and Nacon Sa 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 Nacon Sa are associated (or correlated) with FNP Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNP Technologies has no effect on the direction of Nacon Sa i.e., Nacon Sa and FNP Technologies go up and down completely randomly.

Pair Corralation between Nacon Sa and FNP Technologies

If you would invest  53.00  in Nacon Sa on December 21, 2024 and sell it today you would earn a total of  6.00  from holding Nacon Sa or generate 11.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nacon Sa  vs.  FNP Technologies SA

Nacon Sa

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nacon Sa are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Nacon Sa reported solid returns over the last few months and may actually be approaching a breakup point.

FNP Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days FNP Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FNP Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nacon Sa and FNP Technologies

The main advantage of trading using opposite Nacon Sa and FNP Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nacon Sa position performs unexpectedly, FNP Technologies 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 FNP Technologies will offset losses from the drop in FNP Technologies' long position.

The idea behind Nacon Sa and FNP Technologies SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.