Correlation Between Comfort Systems and Bouygues
Can any of the company-specific risk be diversified away by investing in both Comfort Systems 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 Comfort Systems and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comfort Systems USA and Bouygues SA, you can compare the effects of market volatilities on Comfort Systems 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 Comfort Systems with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comfort Systems and Bouygues.
Diversification Opportunities for Comfort Systems and Bouygues
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Comfort and Bouygues is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Comfort Systems USA and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA and Comfort Systems 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 Comfort Systems USA 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 Comfort Systems i.e., Comfort Systems and Bouygues go up and down completely randomly.
Pair Corralation between Comfort Systems and Bouygues
Considering the 90-day investment horizon Comfort Systems USA is expected to generate 0.67 times more return on investment than Bouygues. However, Comfort Systems USA is 1.49 times less risky than Bouygues. It trades about 0.47 of its potential returns per unit of risk. Bouygues SA is currently generating about -0.14 per unit of risk. If you would invest 38,899 in Comfort Systems USA on August 28, 2024 and sell it today you would earn a total of 10,609 from holding Comfort Systems USA or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Comfort Systems USA vs. Bouygues SA
Performance |
| Timeline |
| Comfort Systems USA |
| Bouygues SA |
Comfort Systems and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comfort Systems and Bouygues
The main advantage of trading using opposite Comfort Systems and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comfort Systems 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.| Comfort Systems vs. MYR Group | Comfort Systems vs. Granite Construction Incorporated | Comfort Systems vs. Dycom Industries | Comfort Systems vs. MasTec Inc |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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