Correlation Between Pernod Ricard and Bouygues
Can any of the company-specific risk be diversified away by investing in both Pernod Ricard 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 Pernod Ricard and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pernod Ricard SA and Bouygues SA, you can compare the effects of market volatilities on Pernod Ricard 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 Pernod Ricard with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pernod Ricard and Bouygues.
Diversification Opportunities for Pernod Ricard and Bouygues
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pernod and Bouygues is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pernod Ricard SA and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA and Pernod Ricard 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 Pernod Ricard 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 Pernod Ricard i.e., Pernod Ricard and Bouygues go up and down completely randomly.
Pair Corralation between Pernod Ricard and Bouygues
Assuming the 90 days horizon Pernod Ricard SA is expected to under-perform the Bouygues. In addition to that, Pernod Ricard is 1.16 times more volatile than Bouygues SA. It trades about -0.07 of its total potential returns per unit of risk. Bouygues SA is currently generating about 0.02 per unit of volatility. If you would invest 2,614 in Bouygues SA on August 29, 2024 and sell it today you would earn a total of 229.00 from holding Bouygues SA or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pernod Ricard SA vs. Bouygues SA
Performance |
| Timeline |
| Pernod Ricard SA |
| Bouygues SA |
Pernod Ricard and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pernod Ricard and Bouygues
The main advantage of trading using opposite Pernod Ricard and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pernod Ricard 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.| Pernod Ricard vs. LOreal SA | Pernod Ricard vs. Danone SA | Pernod Ricard vs. Compagnie Generale des | Pernod Ricard vs. Air Liquide SA |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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