Correlation Between Vinci SA and Union Technologies
Can any of the company-specific risk be diversified away by investing in both Vinci SA and Union Technologies 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 Union Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vinci SA and Union Technologies Informatique, you can compare the effects of market volatilities on Vinci SA and Union Technologies 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 Union Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci SA and Union Technologies.
Diversification Opportunities for Vinci SA and Union Technologies
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vinci and Union is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA and Union Technologies Informatiqu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Technologies 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 Union Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Technologies has no effect on the direction of Vinci SA i.e., Vinci SA and Union Technologies go up and down completely randomly.
Pair Corralation between Vinci SA and Union Technologies
Assuming the 90 days horizon Vinci SA is expected to under-perform the Union Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Vinci SA is 4.07 times less risky than Union Technologies. The stock trades about -0.18 of its potential returns per unit of risk. The Union Technologies Informatique is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Union Technologies Informatique on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Union Technologies Informatique or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vinci SA vs. Union Technologies Informatiqu
Performance |
| Timeline |
| Vinci SA |
| Union Technologies |
Vinci SA and Union Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vinci SA and Union Technologies
The main advantage of trading using opposite Vinci SA and Union Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci SA position performs unexpectedly, Union Technologies 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 Union Technologies will offset losses from the drop in Union Technologies' 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 |
| Union Technologies vs. Neurones | Union Technologies vs. Manitou BF SA | Union Technologies vs. Ossiam Minimum Variance | Union Technologies vs. Granite 3x LVMH |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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