Correlation Between NRJ and VIEL Cie

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

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

Diversification Opportunities for NRJ and VIEL Cie

0.47

Correlation Coefficient

NRJ  VIEL Cie

Very weak diversification

The 3 months correlation between NRJ and VIEL is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding NRJ Group and VIEL Cie socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIEL Cie socit 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 VIEL Cie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIEL Cie socit has no effect on the direction of NRJ i.e., NRJ and VIEL Cie go up and down completely randomly.

Pair Corralation between NRJ and VIEL Cie

Assuming the 90 days trading horizon NRJ Group is expected to under-perform the VIEL Cie. But the stock apears to be less risky and, when comparing its historical volatility, NRJ Group is 1.6 times less risky than VIEL Cie. The stock trades about -0.02 of its potential returns per unit of risk. The VIEL Cie socit is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,135  in VIEL Cie socit on December 28, 2024 and sell it today you would earn a total of  185.00  from holding VIEL Cie socit or generate 16.3% return on investment over 90 days.

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

NRJ Group  vs.  VIEL Cie socit

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.

VIEL Cie socit

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VIEL Cie socit are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, VIEL Cie sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NRJ and VIEL Cie

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

The idea behind NRJ Group and VIEL Cie socit 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.