Correlation Between Eiffage SA and Construction Partners
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Construction Partners 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 Construction Partners 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 Construction Partners, you can compare the effects of market volatilities on Eiffage SA and Construction Partners 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 Construction Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Construction Partners.
Diversification Opportunities for Eiffage SA and Construction Partners
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eiffage and Construction is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA ADR and Construction Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Construction Partners 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 Construction Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Construction Partners has no effect on the direction of Eiffage SA i.e., Eiffage SA and Construction Partners go up and down completely randomly.
Pair Corralation between Eiffage SA and Construction Partners
Assuming the 90 days horizon Eiffage SA ADR is expected to under-perform the Construction Partners. But the pink sheet apears to be less risky and, when comparing its historical volatility, Eiffage SA ADR is 1.46 times less risky than Construction Partners. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Construction Partners is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,347 in Construction Partners on September 12, 2024 and sell it today you would earn a total of 6,328 from holding Construction Partners or generate 189.06% 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. Construction Partners
Performance |
| Timeline |
| Eiffage SA ADR |
| Construction Partners |
Eiffage SA and Construction Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eiffage SA and Construction Partners
The main advantage of trading using opposite Eiffage SA and Construction Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Construction Partners 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 Construction Partners will offset losses from the drop in Construction Partners' 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 |
| Construction Partners vs. MYR Group | Construction Partners vs. Granite Construction Incorporated | Construction Partners vs. Tutor Perini | Construction Partners vs. Sterling Construction |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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