Correlation Between Seche Environnem and NSC Groupe

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

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

Diversification Opportunities for Seche Environnem and NSC Groupe

0.41

Correlation Coefficient

Seche Environnem  NSC Groupe

Very weak diversification

The 3 months correlation between Seche and NSC is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnem and NSC Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSC Groupe SA and Seche Environnem 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 Seche Environnem are associated (or correlated) with NSC Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSC Groupe SA has no effect on the direction of Seche Environnem i.e., Seche Environnem and NSC Groupe go up and down completely randomly.

Pair Corralation between Seche Environnem and NSC Groupe

Assuming the 90 days trading horizon Seche Environnem is expected to generate 0.66 times more return on investment than NSC Groupe. However, Seche Environnem is 1.52 times less risky than NSC Groupe. It trades about 0.16 of its potential returns per unit of risk. NSC Groupe SA is currently generating about 0.11 per unit of risk. If you would invest  8,571  in Seche Environnem on April 25, 2025 and sell it today you would earn a total of  1,669  from holding Seche Environnem or generate 19.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Seche Environnem  vs.  NSC Groupe SA

Seche Environnem

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Seche Environnem are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Seche Environnem sustained solid returns over the last few months and may actually be approaching a breakup point.

NSC Groupe SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NSC Groupe SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, NSC Groupe reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seche Environnem and NSC Groupe

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

The idea behind Seche Environnem and NSC Groupe 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.