Correlation Between Manitou BF and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Manitou BF 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 Manitou BF and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Eiffage SA, you can compare the effects of market volatilities on Manitou BF 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 Manitou BF with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Eiffage SA.
Diversification Opportunities for Manitou BF and Eiffage SA
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Manitou and Eiffage is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA and Manitou BF 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 Manitou BF SA 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 has no effect on the direction of Manitou BF i.e., Manitou BF and Eiffage SA go up and down completely randomly.
Pair Corralation between Manitou BF and Eiffage SA
Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the Eiffage SA. In addition to that, Manitou BF is 1.91 times more volatile than Eiffage SA. It trades about -0.2 of its total potential returns per unit of risk. Eiffage SA is currently generating about -0.14 per unit of volatility. If you would invest 8,690 in Eiffage SA on August 28, 2024 and sell it today you would lose (288.00) from holding Eiffage SA or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. Eiffage SA
Performance |
| Timeline |
| Manitou BF SA |
| Eiffage SA |
Manitou BF and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Eiffage SA
The main advantage of trading using opposite Manitou BF and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF 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.| Manitou BF vs. Publicis Groupe SA | Manitou BF vs. Pernod Ricard SA | Manitou BF vs. Compagnie Generale des | Manitou BF vs. Compagnie de Saint Gobain |
| Eiffage SA vs. SQLI SA | Eiffage SA vs. Foncire Volta | Eiffage SA vs. Moulinvest | Eiffage SA vs. Manitou BF SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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