Correlation Between Batm Advanced and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Batm Advanced 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 Batm Advanced and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Eiffage SA, you can compare the effects of market volatilities on Batm Advanced 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 Batm Advanced with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Eiffage SA.
Diversification Opportunities for Batm Advanced and Eiffage SA
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Batm and Eiffage is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA and Batm Advanced 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 Batm Advanced Communications 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 Batm Advanced i.e., Batm Advanced and Eiffage SA go up and down completely randomly.
Pair Corralation between Batm Advanced and Eiffage SA
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Eiffage SA. In addition to that, Batm Advanced is 2.23 times more volatile than Eiffage SA. It trades about -0.02 of its total potential returns per unit of risk. Eiffage SA is currently generating about 0.0 per unit of volatility. If you would invest 9,013 in Eiffage SA on September 12, 2024 and sell it today you would lose (272.00) from holding Eiffage SA or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Eiffage SA
Performance |
| Timeline |
| Batm Advanced Commun |
| Eiffage SA |
Batm Advanced and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Eiffage SA
The main advantage of trading using opposite Batm Advanced and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced 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.| Batm Advanced vs. Home Depot | Batm Advanced vs. Chrysalis Investments | Batm Advanced vs. Neometals | Batm Advanced vs. Coor Service Management |
| Eiffage SA vs. Systemair AB | Eiffage SA vs. Sealed Air Corp | Eiffage SA vs. Batm Advanced Communications | Eiffage SA vs. Tata Steel Limited |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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