Correlation Between Eiffage SA and Dassault Aviation
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Dassault Aviation 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 Dassault Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eiffage SA and Dassault Aviation SA, you can compare the effects of market volatilities on Eiffage SA and Dassault Aviation 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 Dassault Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Dassault Aviation.
Diversification Opportunities for Eiffage SA and Dassault Aviation
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eiffage and Dassault is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA and Dassault Aviation SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Aviation 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 are associated (or correlated) with Dassault Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Aviation has no effect on the direction of Eiffage SA i.e., Eiffage SA and Dassault Aviation go up and down completely randomly.
Pair Corralation between Eiffage SA and Dassault Aviation
Assuming the 90 days trading horizon Eiffage SA is expected to under-perform the Dassault Aviation. But the stock apears to be less risky and, when comparing its historical volatility, Eiffage SA is 1.55 times less risky than Dassault Aviation. The stock trades about -0.02 of its potential returns per unit of risk. The Dassault Aviation SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 18,580 in Dassault Aviation SA on August 31, 2024 and sell it today you would earn a total of 330.00 from holding Dassault Aviation SA or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eiffage SA vs. Dassault Aviation SA
Performance |
| Timeline |
| Eiffage SA |
| Dassault Aviation |
Eiffage SA and Dassault Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eiffage SA and Dassault Aviation
The main advantage of trading using opposite Eiffage SA and Dassault Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Dassault Aviation 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 Dassault Aviation will offset losses from the drop in Dassault Aviation's long position.| Eiffage SA vs. Vinci SA | Eiffage SA vs. Bouygues SA | Eiffage SA vs. Legrand SA | Eiffage SA vs. Compagnie de Saint Gobain |
| Dassault Aviation vs. Thales SA | Dassault Aviation vs. Dassault Systemes SE | Dassault Aviation vs. Safran SA | Dassault Aviation vs. Eiffage 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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