Correlation Between Nasdaq and Groupama Entreprises

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

By analyzing existing cross correlation between Nasdaq Inc and Groupama Entreprises N, you can compare the effects of market volatilities on Nasdaq and Groupama Entreprises 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 Nasdaq with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Groupama Entreprises.

Diversification Opportunities for Nasdaq and Groupama Entreprises

0.85

Correlation Coefficient

Nasdaq  Groupama Entreprises

Very poor diversification

The 3 months correlation between Nasdaq and Groupama is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of Nasdaq i.e., Nasdaq and Groupama Entreprises go up and down completely randomly.

Pair Corralation between Nasdaq and Groupama Entreprises

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 85.88 times more return on investment than Groupama Entreprises. However, Nasdaq is 85.88 times more volatile than Groupama Entreprises N. It trades about 0.15 of its potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.98 per unit of risk. If you would invest  7,370  in Nasdaq Inc on October 1, 2024 and sell it today you would earn a total of  472.00  from holding Nasdaq Inc or generate 6.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	92.86%
Values	Daily Returns

Nasdaq Inc  vs.  Groupama Entreprises N

Nasdaq Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Groupama Entreprises

Risk-Adjusted Performance

77 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 77 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq and Groupama Entreprises

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

The idea behind Nasdaq Inc and Groupama Entreprises N 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.