Correlation Between Groupe Sfpi and NSE SA

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

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

Diversification Opportunities for Groupe Sfpi and NSE SA

0.1

Correlation Coefficient

Groupe Sfpi  NSE SA

Average diversification

The 3 months correlation between Groupe and NSE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Sfpi and NSE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSE SA and Groupe Sfpi 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 Groupe Sfpi are associated (or correlated) with NSE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSE SA has no effect on the direction of Groupe Sfpi i.e., Groupe Sfpi and NSE SA go up and down completely randomly.

Pair Corralation between Groupe Sfpi and NSE SA

Assuming the 90 days trading horizon Groupe Sfpi is expected to generate 1.57 times more return on investment than NSE SA. However, Groupe Sfpi is 1.57 times more volatile than NSE SA. It trades about 0.07 of its potential returns per unit of risk. NSE SA is currently generating about -0.12 per unit of risk. If you would invest  189.00  in Groupe Sfpi on September 14, 2024 and sell it today you would earn a total of  13.00  from holding Groupe Sfpi or generate 6.88% return on investment over 90 days.

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

Groupe Sfpi  vs.  NSE SA

Groupe Sfpi

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Sfpi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Groupe Sfpi may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NSE SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSE SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Groupe Sfpi and NSE SA

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

The idea behind Groupe Sfpi and NSE 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.