Correlation Between Comfort Systems and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Comfort Systems and Eiffage 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 Comfort Systems and Eiffage SA 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 Eiffage SA ADR, you can compare the effects of market volatilities on Comfort Systems and Eiffage 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 Comfort Systems with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comfort Systems and Eiffage SA.
Diversification Opportunities for Comfort Systems and Eiffage SA
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Comfort and Eiffage is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Comfort Systems USA and Eiffage SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA ADR 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 Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA ADR has no effect on the direction of Comfort Systems i.e., Comfort Systems and Eiffage SA go up and down completely randomly.
Pair Corralation between Comfort Systems and Eiffage SA
Considering the 90-day investment horizon Comfort Systems USA is expected to generate 1.47 times more return on investment than Eiffage SA. However, Comfort Systems is 1.47 times more volatile than Eiffage SA ADR. It trades about 0.12 of its potential returns per unit of risk. Eiffage SA ADR is currently generating about -0.01 per unit of risk. If you would invest 15,876 in Comfort Systems USA on September 12, 2024 and sell it today you would earn a total of 30,044 from holding Comfort Systems USA or generate 189.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.66% |
| Values | Daily Returns |
Comfort Systems USA vs. Eiffage SA ADR
Performance |
| Timeline |
| Comfort Systems USA |
| Eiffage SA ADR |
Comfort Systems and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comfort Systems and Eiffage SA
The main advantage of trading using opposite Comfort Systems and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comfort Systems position performs unexpectedly, Eiffage 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.| Comfort Systems vs. MYR Group | Comfort Systems vs. Granite Construction Incorporated | Comfort Systems vs. Dycom Industries | Comfort Systems vs. MasTec Inc |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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