Correlation Between Vinci SA and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Vinci SA 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 Vinci SA and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vinci SA and Eiffage SA, you can compare the effects of market volatilities on Vinci SA 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 Vinci SA with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci SA and Eiffage SA.
Diversification Opportunities for Vinci SA and Eiffage SA
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vinci and Eiffage is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA and Vinci SA 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 Vinci SA 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 Vinci SA i.e., Vinci SA and Eiffage SA go up and down completely randomly.
Pair Corralation between Vinci SA and Eiffage SA
Assuming the 90 days horizon Vinci SA is expected to generate 0.91 times more return on investment than Eiffage SA. However, Vinci SA is 1.1 times less risky than Eiffage SA. It trades about 0.02 of its potential returns per unit of risk. Eiffage SA is currently generating about 0.0 per unit of risk. If you would invest 9,976 in Vinci SA on November 19, 2024 and sell it today you would earn a total of 859.00 from holding Vinci SA or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vinci SA vs. Eiffage SA
Performance |
| Timeline |
| Vinci SA |
| Eiffage SA |
Vinci SA and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vinci SA and Eiffage SA
The main advantage of trading using opposite Vinci SA and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci SA 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.| Vinci SA vs. Air Liquide SA | Vinci SA vs. Bouygues SA | Vinci SA vs. AXA SA | Vinci SA vs. Compagnie de Saint Gobain |
| Eiffage SA vs. Vinci SA | Eiffage SA vs. Bouygues SA | Eiffage SA vs. Legrand SA | Eiffage SA vs. Compagnie de Saint Gobain |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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