Correlation Between Poxel SA and Bouygues
Can any of the company-specific risk be diversified away by investing in both Poxel SA 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 Poxel SA and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poxel SA and Bouygues SA, you can compare the effects of market volatilities on Poxel SA 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 Poxel SA with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poxel SA and Bouygues.
Diversification Opportunities for Poxel SA and Bouygues
Poor diversification
The 3 months correlation between Poxel and Bouygues is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Poxel SA and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA and Poxel SA 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 Poxel SA 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 Poxel SA i.e., Poxel SA and Bouygues go up and down completely randomly.
Pair Corralation between Poxel SA and Bouygues
Assuming the 90 days trading horizon Poxel SA is expected to under-perform the Bouygues. In addition to that, Poxel SA is 8.38 times more volatile than Bouygues SA. It trades about -0.02 of its total potential returns per unit of risk. Bouygues SA is currently generating about -0.04 per unit of volatility. If you would invest 3,222 in Bouygues SA on November 2, 2024 and sell it today you would lose (158.00) from holding Bouygues SA or give up 4.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Poxel SA vs. Bouygues SA
Performance |
| Timeline |
| Poxel SA |
| Bouygues SA |
Poxel SA and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poxel SA and Bouygues
The main advantage of trading using opposite Poxel SA and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poxel SA 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.| Poxel SA vs. Reworld Media | Poxel SA vs. Eutelsat Communications SA | Poxel SA vs. Sidetrade | Poxel SA vs. Ubisoft Entertainment |
| Bouygues vs. Vinci SA | Bouygues vs. Compagnie de Saint Gobain | Bouygues vs. Orange SA | Bouygues vs. Veolia Environnement VE |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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