Correlation Between Eiffage SA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Eiffage SA and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Dow Jones.
Diversification Opportunities for Eiffage SA and Dow Jones
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eiffage and Dow is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA ADR and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Eiffage SA i.e., Eiffage SA and Dow Jones go up and down completely randomly.
Pair Corralation between Eiffage SA and Dow Jones
Assuming the 90 days horizon Eiffage SA ADR is expected to under-perform the Dow Jones. In addition to that, Eiffage SA is 2.82 times more volatile than Dow Jones Industrial. It trades about -0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 per unit of volatility. If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eiffage SA ADR vs. Dow Jones Industrial
Performance |
| Timeline |
Eiffage SA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Eiffage SA ADR
Pair trading matchups for Eiffage SA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Eiffage SA and Dow Jones
The main advantage of trading using opposite Eiffage SA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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