Correlation Between Compagnie Generale and Vinci SA
Can any of the company-specific risk be diversified away by investing in both Compagnie Generale and Vinci 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 Compagnie Generale and Vinci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Generale des and Vinci SA ADR, you can compare the effects of market volatilities on Compagnie Generale and Vinci 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 Compagnie Generale with a short position of Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Generale and Vinci SA.
Diversification Opportunities for Compagnie Generale and Vinci SA
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Compagnie and Vinci is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Generale des and Vinci SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA ADR and Compagnie Generale 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 Compagnie Generale des are associated (or correlated) with Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA ADR has no effect on the direction of Compagnie Generale i.e., Compagnie Generale and Vinci SA go up and down completely randomly.
Pair Corralation between Compagnie Generale and Vinci SA
Assuming the 90 days horizon Compagnie Generale des is expected to generate 0.92 times more return on investment than Vinci SA. However, Compagnie Generale des is 1.08 times less risky than Vinci SA. It trades about 0.01 of its potential returns per unit of risk. Vinci SA ADR is currently generating about -0.03 per unit of risk. If you would invest 1,693 in Compagnie Generale des on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Compagnie Generale des or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Compagnie Generale des vs. Vinci SA ADR
Performance |
| Timeline |
| Compagnie Generale des |
| Vinci SA ADR |
Compagnie Generale and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Generale and Vinci SA
The main advantage of trading using opposite Compagnie Generale and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Generale position performs unexpectedly, Vinci 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 Vinci SA will offset losses from the drop in Vinci SA's long position.| Compagnie Generale vs. Continental Aktiengesellschaft | Compagnie Generale vs. Bridgestone Corp ADR | Compagnie Generale vs. Goodyear Tire Rubber | Compagnie Generale vs. Brembo SpA |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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