Correlation Between Fill Up and Bouygues
Can any of the company-specific risk be diversified away by investing in both Fill Up and Bouygues 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 Fill Up and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fill Up Media and Bouygues SA, you can compare the effects of market volatilities on Fill Up and Bouygues 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 Fill Up with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fill Up and Bouygues.
Diversification Opportunities for Fill Up and Bouygues
Modest diversification
The 3 months correlation between Fill and Bouygues is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fill Up Media and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA and Fill Up 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 Fill Up Media are associated (or correlated) with Bouygues. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bouygues SA has no effect on the direction of Fill Up i.e., Fill Up and Bouygues go up and down completely randomly.
Pair Corralation between Fill Up and Bouygues
Assuming the 90 days trading horizon Fill Up Media is expected to under-perform the Bouygues. In addition to that, Fill Up is 2.06 times more volatile than Bouygues SA. It trades about -0.02 of its total potential returns per unit of risk. Bouygues SA is currently generating about 0.03 per unit of volatility. If you would invest 2,530 in Bouygues SA on September 12, 2024 and sell it today you would earn a total of 366.00 from holding Bouygues SA or generate 14.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fill Up Media vs. Bouygues SA
Performance |
| Timeline |
| Fill Up Media |
| Bouygues SA |
Fill Up and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fill Up and Bouygues
The main advantage of trading using opposite Fill Up and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fill Up position performs unexpectedly, Bouygues 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 Bouygues will offset losses from the drop in Bouygues' long position.| Fill Up vs. Bouygues SA | Fill Up vs. Legrand SA | Fill Up vs. Sodexo SA | Fill Up vs. Compagnie de Saint Gobain |
| Bouygues vs. Vinci SA | Bouygues vs. Compagnie de Saint Gobain | Bouygues vs. Orange SA | Bouygues vs. Veolia Environnement VE |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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