Correlation Between Comfort Systems and Bouygues

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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

ComfortBouyguesDiversified AwayComfortBouyguesDiversified Away100%
-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between Comfort and Bouygues is -0.03. 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 under-perform the Bouygues. In addition to that, Comfort Systems is 6.93 times more volatile than Bouygues SA. It trades about -0.06 of its total potential returns per unit of risk. Bouygues SA is currently generating about 0.33 per unit of volatility. If you would invest  2,956  in Bouygues SA on November 23, 2024 and sell it today you would earn a total of  229.00  from holding Bouygues SA or generate 7.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy77.5%
ValuesDaily Returns

Comfort Systems USA  vs.  Bouygues SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510152025
JavaScript chart by amCharts 3.21.15FIX BOUYF
       Timeline  
Comfort Systems USA 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Comfort Systems USA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb400450500550
Bouygues SA 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Bouygues SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Bouygues may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15JulOctFebJunJulJanOctFebJunJulJan293031323334353637

Comfort Systems and Bouygues Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.97-5.22-3.47-1.720.01.623.34.986.658.33 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15FIX BOUYF
       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.
The idea behind Comfort Systems USA and Bouygues SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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