Correlation Between Skanska AB and Vinci SA
Can any of the company-specific risk be diversified away by investing in both Skanska AB 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 Skanska AB and Vinci SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skanska AB ser and Vinci SA ADR, you can compare the effects of market volatilities on Skanska AB 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 Skanska AB with a short position of Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skanska AB and Vinci SA.
Diversification Opportunities for Skanska AB and Vinci SA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Skanska and Vinci is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Skanska AB ser 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 Skanska AB 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 Skanska AB ser 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 Skanska AB i.e., Skanska AB and Vinci SA go up and down completely randomly.
Pair Corralation between Skanska AB and Vinci SA
Assuming the 90 days horizon Skanska AB ser is expected to generate 1.58 times more return on investment than Vinci SA. However, Skanska AB is 1.58 times more volatile than Vinci SA ADR. It trades about 0.04 of its potential returns per unit of risk. Vinci SA ADR is currently generating about 0.02 per unit of risk. If you would invest 1,508 in Skanska AB ser on August 30, 2024 and sell it today you would earn a total of 504.00 from holding Skanska AB ser or generate 33.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skanska AB ser vs. Vinci SA ADR
Performance |
| Timeline |
| Skanska AB ser |
| Vinci SA ADR |
Skanska AB and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skanska AB and Vinci SA
The main advantage of trading using opposite Skanska AB and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skanska AB 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.| Skanska AB vs. ACS Actividades De | Skanska AB vs. Arcadis NV | Skanska AB vs. Badger Infrastructure Solutions | Skanska AB vs. Acciona SA |
| Vinci SA vs. Arcadis NV | Vinci SA vs. KBR Inc | Vinci SA vs. Orion Group Holdings | Vinci SA vs. Jacobs Solutions |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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