Correlation Between Aecon and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Aecon 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 Aecon and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecon Group and Eiffage SA ADR, you can compare the effects of market volatilities on Aecon 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 Aecon with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecon and Eiffage SA.
Diversification Opportunities for Aecon and Eiffage SA
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aecon and Eiffage is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aecon Group and Eiffage SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA ADR and Aecon 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 Aecon Group 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 ADR has no effect on the direction of Aecon i.e., Aecon and Eiffage SA go up and down completely randomly.
Pair Corralation between Aecon and Eiffage SA
Assuming the 90 days horizon Aecon Group is expected to generate 2.27 times more return on investment than Eiffage SA. However, Aecon is 2.27 times more volatile than Eiffage SA ADR. It trades about 0.09 of its potential returns per unit of risk. Eiffage SA ADR is currently generating about 0.0 per unit of risk. If you would invest 623.00 in Aecon Group on September 3, 2024 and sell it today you would earn a total of 1,433 from holding Aecon Group or generate 230.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 88.37% |
| Values | Daily Returns |
Aecon Group vs. Eiffage SA ADR
Performance |
| Timeline |
| Aecon Group |
| Eiffage SA ADR |
Aecon and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aecon and Eiffage SA
The main advantage of trading using opposite Aecon and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecon 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 Aecon Group and Eiffage SA ADR 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. ACS Actividades de | Eiffage SA vs. ACS Actividades De | Eiffage SA vs. Badger Infrastructure Solutions |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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