This module allows you to analyze existing cross correlation between CAC 40 and NQPH. You can compare the effects of market volatilities on CAC 40 and NQPH 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 CAC 40 with a short position of NQPH. See also your portfolio center. Please also check ongoing floating volatility patterns of CAC 40 and NQPH.
Assuming 30 trading days horizon, CAC 40 is expected to under-perform the NQPH. But the index apears to be less risky and, when comparing its historical volatility, CAC 40 is 1.18 times less risky than NQPH. The index trades about -0.11 of its potential returns per unit of risk. The NQPH is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 94,532 in NQPH on October 17, 2018 and sell it today you would earn a total of 1,443 from holding NQPH or generate 1.53% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding CAC 40 and NQPH in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on NQPH and CAC 40 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 CAC 40 are associated (or correlated) with NQPH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NQPH has no effect on the direction of CAC 40 i.e. CAC 40 and NQPH go up and down completely randomly.
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