Correlation Between Cardano and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Cardano and Eiffage 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 Cardano and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardano and Eiffage SA, you can compare the effects of market volatilities on Cardano and Eiffage 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 Cardano with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Eiffage SA.
Diversification Opportunities for Cardano and Eiffage SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cardano and Eiffage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA and Cardano 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 Cardano are associated (or correlated) with Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA has no effect on the direction of Cardano i.e., Cardano and Eiffage SA go up and down completely randomly.
Pair Corralation between Cardano and Eiffage SA
Assuming the 90 days trading horizon Cardano is expected to generate 2.78 times more return on investment than Eiffage SA. However, Cardano is 2.78 times more volatile than Eiffage SA. It trades about 0.08 of its potential returns per unit of risk. Eiffage SA is currently generating about 0.02 per unit of risk. If you would invest 39.00 in Cardano on November 2, 2024 and sell it today you would earn a total of 57.00 from holding Cardano or generate 146.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 65.44% |
| Values | Daily Returns |
Cardano vs. Eiffage SA
Performance |
| Timeline |
| Cardano |
| Eiffage SA |
Cardano and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardano and Eiffage SA
The main advantage of trading using opposite Cardano and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardano position performs unexpectedly, Eiffage 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.The idea behind Cardano and Eiffage 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.| Eiffage SA vs. Concrete Pumping Holdings | Eiffage SA vs. Orion Group Holdings | Eiffage SA vs. Matrix Service Co | Eiffage SA vs. Limbach Holdings |
Check out your portfolio center.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.
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