Correlation Between Eiffage SA and Great Lakes
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Great Lakes 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 Great Lakes 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 Great Lakes Dredge, you can compare the effects of market volatilities on Eiffage SA and Great Lakes 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 Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Great Lakes.
Diversification Opportunities for Eiffage SA and Great Lakes
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eiffage and Great is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA ADR and Great Lakes Dredge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Dredge 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 Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Dredge has no effect on the direction of Eiffage SA i.e., Eiffage SA and Great Lakes go up and down completely randomly.
Pair Corralation between Eiffage SA and Great Lakes
Assuming the 90 days horizon Eiffage SA ADR is expected to under-perform the Great Lakes. But the pink sheet apears to be less risky and, when comparing its historical volatility, Eiffage SA ADR is 1.65 times less risky than Great Lakes. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Great Lakes Dredge is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 772.00 in Great Lakes Dredge on September 12, 2024 and sell it today you would earn a total of 494.00 from holding Great Lakes Dredge or generate 63.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.66% |
| Values | Daily Returns |
Eiffage SA ADR vs. Great Lakes Dredge
Performance |
| Timeline |
| Eiffage SA ADR |
| Great Lakes Dredge |
Eiffage SA and Great Lakes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eiffage SA and Great Lakes
The main advantage of trading using opposite Eiffage SA and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' 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 |
| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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