Correlation Between NRJ and Groupe Partouche

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

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

Diversification Opportunities for NRJ and Groupe Partouche

-0.26

Correlation Coefficient

NRJ  Groupe Partouche

Very good diversification

The 3 months correlation between NRJ and Groupe is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NRJ Group and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche and NRJ 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 NRJ Group are associated (or correlated) with Groupe Partouche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Partouche has no effect on the direction of NRJ i.e., NRJ and Groupe Partouche go up and down completely randomly.

Pair Corralation between NRJ and Groupe Partouche

Assuming the 90 days trading horizon NRJ Group is expected to under-perform the Groupe Partouche. But the stock apears to be less risky and, when comparing its historical volatility, NRJ Group is 2.17 times less risky than Groupe Partouche. The stock trades about -0.12 of its potential returns per unit of risk. The Groupe Partouche SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,000  in Groupe Partouche SA on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Groupe Partouche SA or generate 0.0% return on investment over 90 days.

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

NRJ Group  vs.  Groupe Partouche SA

NRJ Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NRJ Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Groupe Partouche

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Groupe Partouche SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Groupe Partouche is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NRJ and Groupe Partouche

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

The idea behind NRJ Group and Groupe Partouche 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.