Correlation Between NRJ and Haulotte Group

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

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

Diversification Opportunities for NRJ and Haulotte Group

-0.2

Correlation Coefficient

NRJ  Haulotte Group

Good diversification

The 3 months correlation between NRJ and Haulotte is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NRJ Group and Haulotte Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haulotte Group SA 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 Haulotte Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haulotte Group SA has no effect on the direction of NRJ i.e., NRJ and Haulotte Group go up and down completely randomly.

Pair Corralation between NRJ and Haulotte Group

Assuming the 90 days trading horizon NRJ Group is expected to under-perform the Haulotte Group. But the stock apears to be less risky and, when comparing its historical volatility, NRJ Group is 1.13 times less risky than Haulotte Group. The stock trades about -0.04 of its potential returns per unit of risk. The Haulotte Group SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  265.00  in Haulotte Group SA on December 30, 2024 and sell it today you would earn a total of  23.00  from holding Haulotte Group SA or generate 8.68% 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.  Haulotte Group SA

NRJ Group

Risk-Adjusted Performance

Very Weak

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

Haulotte Group SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Haulotte Group SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Haulotte Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NRJ and Haulotte Group

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

The idea behind NRJ Group and Haulotte Group 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.