Correlation Between Maisons Du and Nexity

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

By analyzing existing cross correlation between Maisons du Monde and Nexity, you can compare the effects of market volatilities on Maisons Du and Nexity 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 Maisons Du with a short position of Nexity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maisons Du and Nexity.

Diversification Opportunities for Maisons Du and Nexity

0.27

Correlation Coefficient

Maisons Du  Nexity

Modest diversification

The 3 months correlation between Maisons and Nexity is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Maisons du Monde and Nexity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexity and Maisons Du 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 Maisons du Monde are associated (or correlated) with Nexity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexity has no effect on the direction of Maisons Du i.e., Maisons Du and Nexity go up and down completely randomly.

Pair Corralation between Maisons Du and Nexity

Assuming the 90 days trading horizon Maisons Du is expected to generate 1.06 times less return on investment than Nexity. In addition to that, Maisons Du is 1.15 times more volatile than Nexity. It trades about 0.05 of its total potential returns per unit of risk. Nexity is currently generating about 0.07 per unit of volatility. If you would invest  1,178  in Nexity on September 28, 2024 and sell it today you would earn a total of  100.00  from holding Nexity or generate 8.49% return on investment over 90 days.

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

Maisons du Monde  vs.  Nexity

Maisons du Monde

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maisons du Monde are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Maisons Du may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nexity

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Maisons Du and Nexity

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

The idea behind Maisons du Monde and Nexity 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.