Correlation Between FrontView REIT, and Nexans SA

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

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

Diversification Opportunities for FrontView REIT, and Nexans SA

-0.19

Correlation Coefficient

FrontView REIT,  Nexans SA

Good diversification

The 3 months correlation between FrontView and Nexans is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Nexans SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexans SA and FrontView REIT, 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 FrontView REIT, are associated (or correlated) with Nexans SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexans SA has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Nexans SA go up and down completely randomly.

Pair Corralation between FrontView REIT, and Nexans SA

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Nexans SA. In addition to that, FrontView REIT, is 1.27 times more volatile than Nexans SA. It trades about -0.08 of its total potential returns per unit of risk. Nexans SA is currently generating about 0.22 per unit of volatility. If you would invest  10,720  in Nexans SA on September 23, 2024 and sell it today you would earn a total of  528.00  from holding Nexans SA or generate 4.93% return on investment over 90 days.

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

FrontView REIT,  vs.  Nexans SA

FrontView REIT,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Nexans SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nexans SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with FrontView REIT, and Nexans SA

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

The idea behind FrontView REIT, and Nexans 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.