Correlation Between Construction Partners and Bouygues
Can any of the company-specific risk be diversified away by investing in both Construction Partners 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 Construction Partners and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Construction Partners and Bouygues SA, you can compare the effects of market volatilities on Construction Partners 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 Construction Partners with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction Partners and Bouygues.
Diversification Opportunities for Construction Partners and Bouygues
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Construction and Bouygues is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Construction Partners and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA and Construction Partners 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 Construction Partners 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 Construction Partners i.e., Construction Partners and Bouygues go up and down completely randomly.
Pair Corralation between Construction Partners and Bouygues
Given the investment horizon of 90 days Construction Partners is expected to generate 0.93 times more return on investment than Bouygues. However, Construction Partners is 1.08 times less risky than Bouygues. It trades about 0.35 of its potential returns per unit of risk. Bouygues SA is currently generating about -0.14 per unit of risk. If you would invest 7,933 in Construction Partners on August 28, 2024 and sell it today you would earn a total of 2,195 from holding Construction Partners or generate 27.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Construction Partners vs. Bouygues SA
Performance |
| Timeline |
| Construction Partners |
| Bouygues SA |
Construction Partners and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction Partners and Bouygues
The main advantage of trading using opposite Construction Partners and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction Partners 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.| Construction Partners vs. MYR Group | Construction Partners vs. Granite Construction Incorporated | Construction Partners vs. Tutor Perini | Construction Partners vs. Sterling Construction |
| Bouygues vs. NV5 Global | Bouygues vs. Matrix Service Co | Bouygues vs. MYR Group | Bouygues vs. Comfort Systems USA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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