Correlation Between Bouygues and SNC Lavalin
Can any of the company-specific risk be diversified away by investing in both Bouygues and SNC Lavalin 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 Bouygues and SNC Lavalin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bouygues SA ADR and SNC Lavalin Group, you can compare the effects of market volatilities on Bouygues and SNC Lavalin 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 Bouygues with a short position of SNC Lavalin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bouygues and SNC Lavalin.
Diversification Opportunities for Bouygues and SNC Lavalin
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bouygues and SNC is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bouygues SA ADR and SNC Lavalin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC Lavalin Group and Bouygues 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 Bouygues SA ADR are associated (or correlated) with SNC Lavalin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC Lavalin Group has no effect on the direction of Bouygues i.e., Bouygues and SNC Lavalin go up and down completely randomly.
Pair Corralation between Bouygues and SNC Lavalin
Assuming the 90 days horizon Bouygues is expected to generate 21.09 times less return on investment than SNC Lavalin. But when comparing it to its historical volatility, Bouygues SA ADR is 1.73 times less risky than SNC Lavalin. It trades about 0.01 of its potential returns per unit of risk. SNC Lavalin Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,030 in SNC Lavalin Group on August 31, 2024 and sell it today you would earn a total of 3,255 from holding SNC Lavalin Group or generate 160.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 85.74% |
| Values | Daily Returns |
Bouygues SA ADR vs. SNC Lavalin Group
Performance |
| Timeline |
| Bouygues SA ADR |
| SNC Lavalin Group |
Bouygues and SNC Lavalin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bouygues and SNC Lavalin
The main advantage of trading using opposite Bouygues and SNC Lavalin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bouygues position performs unexpectedly, SNC Lavalin 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 SNC Lavalin will offset losses from the drop in SNC Lavalin's long position.| Bouygues vs. SNC Lavalin Group | Bouygues vs. WSP Global | Bouygues vs. Willdan Group | Bouygues vs. Comfort Systems USA |
| SNC Lavalin vs. Aecon Group | SNC Lavalin vs. Acciona SA | SNC Lavalin vs. WSP Global | SNC Lavalin vs. SIG Combibloc Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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