Correlation Between Eiffage SA and Edenred SA
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Edenred 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 Eiffage SA and Edenred SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eiffage SA and Edenred SA, you can compare the effects of market volatilities on Eiffage SA and Edenred 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 Eiffage SA with a short position of Edenred SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Edenred SA.
Diversification Opportunities for Eiffage SA and Edenred SA
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eiffage and Edenred is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA and Edenred SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edenred SA 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 Edenred SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edenred SA has no effect on the direction of Eiffage SA i.e., Eiffage SA and Edenred SA go up and down completely randomly.
Pair Corralation between Eiffage SA and Edenred SA
Assuming the 90 days trading horizon Eiffage SA is expected to under-perform the Edenred SA. But the stock apears to be less risky and, when comparing its historical volatility, Eiffage SA is 1.71 times less risky than Edenred SA. The stock trades about -0.14 of its potential returns per unit of risk. The Edenred SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,955 in Edenred SA on August 28, 2024 and sell it today you would earn a total of 51.00 from holding Edenred SA or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eiffage SA vs. Edenred SA
Performance |
| Timeline |
| Eiffage SA |
| Edenred SA |
Eiffage SA and Edenred SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eiffage SA and Edenred SA
The main advantage of trading using opposite Eiffage SA and Edenred SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Edenred 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 Edenred SA will offset losses from the drop in Edenred SA's long position.| Eiffage SA vs. SQLI SA | Eiffage SA vs. Foncire Volta | Eiffage SA vs. Moulinvest | Eiffage SA vs. Manitou BF SA |
| Edenred SA vs. Prodways Group SA | Edenred SA vs. Claranova SE | Edenred SA vs. DBV Technologies SA | Edenred SA vs. Manitou BF 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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