Correlation Between Eiffage SA and Badger Infrastructure
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Badger Infrastructure 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 Eiffage SA and Badger Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eiffage SA ADR and Badger Infrastructure Solutions, you can compare the effects of market volatilities on Eiffage SA and Badger Infrastructure 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 Eiffage SA with a short position of Badger Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Badger Infrastructure.
Diversification Opportunities for Eiffage SA and Badger Infrastructure
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eiffage and Badger is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA ADR and Badger Infrastructure Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Infrastructure and Eiffage 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 Eiffage SA ADR are associated (or correlated) with Badger Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Infrastructure has no effect on the direction of Eiffage SA i.e., Eiffage SA and Badger Infrastructure go up and down completely randomly.
Pair Corralation between Eiffage SA and Badger Infrastructure
Assuming the 90 days horizon Eiffage SA ADR is expected to under-perform the Badger Infrastructure. In addition to that, Eiffage SA is 1.66 times more volatile than Badger Infrastructure Solutions. It trades about -0.12 of its total potential returns per unit of risk. Badger Infrastructure Solutions is currently generating about 0.09 per unit of volatility. If you would invest 2,596 in Badger Infrastructure Solutions on September 4, 2024 and sell it today you would earn a total of 74.00 from holding Badger Infrastructure Solutions or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eiffage SA ADR vs. Badger Infrastructure Solution
Performance |
| Timeline |
| Eiffage SA ADR |
| Badger Infrastructure |
Eiffage SA and Badger Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eiffage SA and Badger Infrastructure
The main advantage of trading using opposite Eiffage SA and Badger Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Badger Infrastructure 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 Badger Infrastructure will offset losses from the drop in Badger Infrastructure's long position.| Eiffage SA vs. Concrete Pumping Holdings | Eiffage SA vs. ACS Actividades de | Eiffage SA vs. ACS Actividades De | Eiffage SA vs. Badger Infrastructure Solutions |
| Badger Infrastructure vs. ACS Actividades De | Badger Infrastructure vs. Arcadis NV | Badger Infrastructure vs. Acciona SA | Badger Infrastructure vs. JGC Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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