Correlation Between Vinci SA and Compagnie
Can any of the company-specific risk be diversified away by investing in both Vinci SA and Compagnie 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 Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vinci SA and Compagnie de Saint Gobain, you can compare the effects of market volatilities on Vinci SA and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci SA and Compagnie.
Diversification Opportunities for Vinci SA and Compagnie
Very good diversification
The 3 months correlation between Vinci and Compagnie is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Vinci SA i.e., Vinci SA and Compagnie go up and down completely randomly.
Pair Corralation between Vinci SA and Compagnie
Assuming the 90 days horizon Vinci SA is expected to generate 0.67 times more return on investment than Compagnie. However, Vinci SA is 1.49 times less risky than Compagnie. It trades about 0.25 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.06 per unit of risk. If you would invest 9,848 in Vinci SA on October 20, 2024 and sell it today you would earn a total of 412.00 from holding Vinci SA or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vinci SA vs. Compagnie de Saint Gobain
Performance |
| Timeline |
| Vinci SA |
| Compagnie de Saint |
Vinci SA and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vinci SA and Compagnie
The main advantage of trading using opposite Vinci SA and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci SA position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie'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 |
| Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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