Correlation Between Bilfinger and JGC Corp
Can any of the company-specific risk be diversified away by investing in both Bilfinger and JGC Corp 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 JGC Corp 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 JGC Corp, you can compare the effects of market volatilities on Bilfinger and JGC Corp 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 JGC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilfinger and JGC Corp.
Diversification Opportunities for Bilfinger and JGC Corp
Average diversification
The 3 months correlation between Bilfinger and JGC is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bilfinger SE ADR and JGC Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGC Corp 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 JGC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGC Corp has no effect on the direction of Bilfinger i.e., Bilfinger and JGC Corp go up and down completely randomly.
Pair Corralation between Bilfinger and JGC Corp
Assuming the 90 days horizon Bilfinger SE ADR is expected to under-perform the JGC Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bilfinger SE ADR is 1.7 times less risky than JGC Corp. The pink sheet trades about -0.31 of its potential returns per unit of risk. The JGC Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,771 in JGC Corp on August 29, 2024 and sell it today you would lose (78.00) from holding JGC Corp or give up 4.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilfinger SE ADR vs. JGC Corp
Performance |
| Timeline |
| Bilfinger SE ADR |
| JGC Corp |
Bilfinger and JGC Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilfinger and JGC Corp
The main advantage of trading using opposite Bilfinger and JGC Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilfinger position performs unexpectedly, JGC Corp 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 JGC Corp will offset losses from the drop in JGC Corp's long position.| Bilfinger vs. Aecom Technology | Bilfinger vs. Matrix Service Co | Bilfinger vs. MYR Group | Bilfinger vs. Fluor |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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