Correlation Between Bilfinger and Arcadis NV
Can any of the company-specific risk be diversified away by investing in both Bilfinger and Arcadis NV 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 Bilfinger and Arcadis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilfinger SE ADR and Arcadis NV, you can compare the effects of market volatilities on Bilfinger and Arcadis NV 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 Bilfinger with a short position of Arcadis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilfinger and Arcadis NV.
Diversification Opportunities for Bilfinger and Arcadis NV
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bilfinger and Arcadis is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bilfinger SE ADR and Arcadis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcadis NV and Bilfinger 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 Bilfinger SE ADR are associated (or correlated) with Arcadis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcadis NV has no effect on the direction of Bilfinger i.e., Bilfinger and Arcadis NV go up and down completely randomly.
Pair Corralation between Bilfinger and Arcadis NV
Assuming the 90 days horizon Bilfinger SE ADR is expected to under-perform the Arcadis NV. In addition to that, Bilfinger is 25.21 times more volatile than Arcadis NV. It trades about -0.31 of its total potential returns per unit of risk. Arcadis NV is currently generating about -0.21 per unit of volatility. If you would invest 6,859 in Arcadis NV on August 29, 2024 and sell it today you would lose (24.00) from holding Arcadis NV or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilfinger SE ADR vs. Arcadis NV
Performance |
| Timeline |
| Bilfinger SE ADR |
| Arcadis NV |
Bilfinger and Arcadis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilfinger and Arcadis NV
The main advantage of trading using opposite Bilfinger and Arcadis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilfinger position performs unexpectedly, Arcadis NV 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 Arcadis NV will offset losses from the drop in Arcadis NV's long position.| Bilfinger vs. Aecom Technology | Bilfinger vs. Matrix Service Co | Bilfinger vs. MYR Group | Bilfinger vs. Fluor |
| Arcadis NV vs. Element Solutions | Arcadis NV vs. Orion Engineered Carbons | Arcadis NV vs. Minerals Technologies | Arcadis NV vs. Ingevity Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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