Correlation Between Nexity and Television Francaise

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

By analyzing existing cross correlation between Nexity and Television Francaise 1, you can compare the effects of market volatilities on Nexity and Television Francaise 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 Nexity with a short position of Television Francaise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexity and Television Francaise.

Diversification Opportunities for Nexity and Television Francaise

0.1

Correlation Coefficient

Nexity  Television Francaise

Average diversification

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

Pair Corralation between Nexity and Television Francaise

Assuming the 90 days trading horizon Nexity is expected to generate 2.16 times more return on investment than Television Francaise. However, Nexity is 2.16 times more volatile than Television Francaise 1. It trades about 0.07 of its potential returns per unit of risk. Television Francaise 1 is currently generating about -0.14 per unit of risk. 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nexity  vs.  Television Francaise 1

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.

Television Francaise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Television Francaise 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Nexity and Television Francaise

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

The idea behind Nexity and Television Francaise 1 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.