Correlation Between Engie SA and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both Engie SA and Vivendi SA 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 Engie SA and Vivendi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Engie SA and Vivendi SA, you can compare the effects of market volatilities on Engie SA and Vivendi SA 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 Engie SA with a short position of Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Engie SA and Vivendi SA.
Diversification Opportunities for Engie SA and Vivendi SA
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Engie and Vivendi is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Engie SA and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SA and Engie 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 Engie SA are associated (or correlated) with Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of Engie SA i.e., Engie SA and Vivendi SA go up and down completely randomly.
Pair Corralation between Engie SA and Vivendi SA
Assuming the 90 days trading horizon Engie SA is expected to under-perform the Vivendi SA. But the stock apears to be less risky and, when comparing its historical volatility, Engie SA is 2.14 times less risky than Vivendi SA. The stock trades about -0.15 of its potential returns per unit of risk. The Vivendi SA is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Vivendi SA on November 18, 2024 and sell it today you would earn a total of 50.00 from holding Vivendi SA or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Engie SA vs. Vivendi SA
Performance |
| Timeline |
| Engie SA |
| Vivendi SA |
Engie SA and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Engie SA and Vivendi SA
The main advantage of trading using opposite Engie SA and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engie SA position performs unexpectedly, Vivendi SA 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 Vivendi SA will offset losses from the drop in Vivendi SA's long position.| Engie SA vs. Orange SA | Engie SA vs. Veolia Environnement VE | Engie SA vs. AXA SA | Engie SA vs. TotalEnergies SE |
| Vivendi SA vs. Vinci SA | Vivendi SA vs. Compagnie de Saint Gobain | Vivendi SA vs. Bouygues SA | Vivendi SA vs. Carrefour SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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