Correlation Between Eiffage SA and Reliant Holdings
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Reliant Holdings 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 Reliant Holdings 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 Reliant Holdings, you can compare the effects of market volatilities on Eiffage SA and Reliant Holdings 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 Reliant Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Reliant Holdings.
Diversification Opportunities for Eiffage SA and Reliant Holdings
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eiffage and Reliant is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA ADR and Reliant Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliant Holdings 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 Reliant Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliant Holdings has no effect on the direction of Eiffage SA i.e., Eiffage SA and Reliant Holdings go up and down completely randomly.
Pair Corralation between Eiffage SA and Reliant Holdings
Assuming the 90 days horizon Eiffage SA is expected to generate 380.87 times less return on investment than Reliant Holdings. But when comparing it to its historical volatility, Eiffage SA ADR is 13.12 times less risky than Reliant Holdings. It trades about 0.0 of its potential returns per unit of risk. Reliant Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Reliant Holdings on September 3, 2024 and sell it today you would lose (5.00) from holding Reliant Holdings or give up 38.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Eiffage SA ADR vs. Reliant Holdings
Performance |
| Timeline |
| Eiffage SA ADR |
| Reliant Holdings |
Eiffage SA and Reliant Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eiffage SA and Reliant Holdings
The main advantage of trading using opposite Eiffage SA and Reliant Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Reliant Holdings 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 Reliant Holdings will offset losses from the drop in Reliant Holdings' 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 |
| Reliant Holdings vs. Travis Perkins PLC | Reliant Holdings vs. Antelope Enterprise Holdings | Reliant Holdings vs. Intelligent Living Application | Reliant Holdings vs. Beacon Roofing Supply |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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