Correlation Between Balfour Beatty and Bouygues
Can any of the company-specific risk be diversified away by investing in both Balfour Beatty 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 Balfour Beatty and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balfour Beatty PLC and Bouygues SA, you can compare the effects of market volatilities on Balfour Beatty 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 Balfour Beatty with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balfour Beatty and Bouygues.
Diversification Opportunities for Balfour Beatty and Bouygues
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Balfour and Bouygues is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Balfour Beatty PLC and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA and Balfour Beatty 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 Balfour Beatty PLC 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 Balfour Beatty i.e., Balfour Beatty and Bouygues go up and down completely randomly.
Pair Corralation between Balfour Beatty and Bouygues
If you would invest 1,022 in Balfour Beatty PLC on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Balfour Beatty PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Balfour Beatty PLC vs. Bouygues SA
Performance |
| Timeline |
| Balfour Beatty PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bouygues SA |
Balfour Beatty and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balfour Beatty and Bouygues
The main advantage of trading using opposite Balfour Beatty and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balfour Beatty 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.| Balfour Beatty vs. ACS Actividades De | Balfour Beatty vs. Arcadis NV | Balfour Beatty vs. Badger Infrastructure Solutions | Balfour Beatty vs. Acciona SA |
| Bouygues vs. NV5 Global | Bouygues vs. Matrix Service Co | Bouygues vs. MYR Group | Bouygues vs. Comfort Systems USA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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