Correlation Between EcoPlus and Bouygues
Can any of the company-specific risk be diversified away by investing in both EcoPlus and Bouygues 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 EcoPlus and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EcoPlus and Bouygues SA, you can compare the effects of market volatilities on EcoPlus and Bouygues 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 EcoPlus with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of EcoPlus and Bouygues.
Diversification Opportunities for EcoPlus and Bouygues
Very good diversification
The 3 months correlation between EcoPlus and Bouygues is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding EcoPlus and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA and EcoPlus 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 EcoPlus are associated (or correlated) with Bouygues. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bouygues SA has no effect on the direction of EcoPlus i.e., EcoPlus and Bouygues go up and down completely randomly.
Pair Corralation between EcoPlus and Bouygues
Given the investment horizon of 90 days EcoPlus is expected to generate 17.37 times more return on investment than Bouygues. However, EcoPlus is 17.37 times more volatile than Bouygues SA. It trades about 0.07 of its potential returns per unit of risk. Bouygues SA is currently generating about 0.5 per unit of risk. If you would invest 2.70 in EcoPlus on November 1, 2024 and sell it today you would lose (0.25) from holding EcoPlus or give up 9.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
EcoPlus vs. Bouygues SA
Performance |
| Timeline |
| EcoPlus |
| Bouygues SA |
EcoPlus and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EcoPlus and Bouygues
The main advantage of trading using opposite EcoPlus and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EcoPlus position performs unexpectedly, Bouygues 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 Bouygues will offset losses from the drop in Bouygues' long position.| EcoPlus vs. Susglobal Energy Corp | EcoPlus vs. LanzaTech Global | EcoPlus vs. Aqua Metals | EcoPlus vs. LiCycle Holdings Corp |
| Bouygues vs. NV5 Global | Bouygues vs. Matrix Service Co | Bouygues vs. MYR Group | Bouygues vs. Comfort Systems USA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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