Correlation Between Eiffage SA and Safran SA
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Safran 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 Safran 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 Safran SA, you can compare the effects of market volatilities on Eiffage SA and Safran 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 Safran SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Safran SA.
Diversification Opportunities for Eiffage SA and Safran SA
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eiffage and Safran is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA and Safran SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safran 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 Safran SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safran SA has no effect on the direction of Eiffage SA i.e., Eiffage SA and Safran SA go up and down completely randomly.
Pair Corralation between Eiffage SA and Safran SA
Assuming the 90 days trading horizon Eiffage SA is expected to generate 116.09 times less return on investment than Safran SA. But when comparing it to its historical volatility, Eiffage SA is 1.25 times less risky than Safran SA. It trades about 0.0 of its potential returns per unit of risk. Safran SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 20,780 in Safran SA on September 1, 2024 and sell it today you would earn a total of 1,270 from holding Safran SA or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eiffage SA vs. Safran SA
Performance |
| Timeline |
| Eiffage SA |
| Safran SA |
Eiffage SA and Safran SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eiffage SA and Safran SA
The main advantage of trading using opposite Eiffage SA and Safran SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Safran 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 Safran SA will offset losses from the drop in Safran SA'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 |
| Safran SA vs. Thales SA | Safran SA vs. Vinci SA | Safran SA vs. Air Liquide SA | Safran SA vs. Dassault Systemes SE |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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