Correlation Between Algorand and Eiffage SA

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Can any of the company-specific risk be diversified away by investing in both Algorand 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 Algorand and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algorand and Eiffage SA, you can compare the effects of market volatilities on Algorand 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 Algorand with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algorand and Eiffage SA.

Diversification Opportunities for Algorand and Eiffage SA

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Algorand and Eiffage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Algorand and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA and Algorand 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 Algorand 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 Algorand i.e., Algorand and Eiffage SA go up and down completely randomly.

Pair Corralation between Algorand and Eiffage SA

Assuming the 90 days trading horizon Algorand is expected to generate 3.68 times more return on investment than Eiffage SA. However, Algorand is 3.68 times more volatile than Eiffage SA. It trades about 0.05 of its potential returns per unit of risk. Eiffage SA is currently generating about 0.02 per unit of risk. If you would invest  25.00  in Algorand on November 2, 2024 and sell it today you would earn a total of  14.00  from holding Algorand or generate 56.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy65.44%
ValuesDaily Returns

Algorand  vs.  Eiffage SA

 Performance 
       Timeline  
Algorand 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Algorand are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Algorand exhibited solid returns over the last few months and may actually be approaching a breakup point.
Eiffage SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Eiffage SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Eiffage SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Algorand and Eiffage SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Algorand and Eiffage SA

The main advantage of trading using opposite Algorand and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algorand 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 Algorand 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.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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