Correlation Between First Bankers and Bouygues
Can any of the company-specific risk be diversified away by investing in both First Bankers and Bouygues 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 First Bankers and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Bankers Trustshares and Bouygues SA, you can compare the effects of market volatilities on First Bankers and Bouygues 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 First Bankers with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Bankers and Bouygues.
Diversification Opportunities for First Bankers and Bouygues
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Bouygues is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding First Bankers Trustshares and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA and First Bankers 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 First Bankers Trustshares are associated (or correlated) with Bouygues. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bouygues SA has no effect on the direction of First Bankers i.e., First Bankers and Bouygues go up and down completely randomly.
Pair Corralation between First Bankers and Bouygues
Given the investment horizon of 90 days First Bankers Trustshares is expected to under-perform the Bouygues. But the otc stock apears to be less risky and, when comparing its historical volatility, First Bankers Trustshares is 2.8 times less risky than Bouygues. The otc stock trades about -0.37 of its potential returns per unit of risk. The Bouygues SA is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 2,854 in Bouygues SA on November 1, 2024 and sell it today you would earn a total of 331.00 from holding Bouygues SA or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Bankers Trustshares vs. Bouygues SA
Performance |
| Timeline |
| First Bankers Trustshares |
| Bouygues SA |
First Bankers and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Bankers and Bouygues
The main advantage of trading using opposite First Bankers and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Bankers position performs unexpectedly, Bouygues 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 Bouygues will offset losses from the drop in Bouygues' long position.| First Bankers vs. Greenville Federal Financial | First Bankers vs. First Ottawa Bancshares | First Bankers vs. Coastal Carolina Bancshares | First Bankers vs. Citizens Bancorp Investment |
| Bouygues vs. NV5 Global | Bouygues vs. Matrix Service Co | Bouygues vs. MYR Group | Bouygues vs. Comfort Systems USA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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