Correlation Between SNC Lavalin and Bouygues
Can any of the company-specific risk be diversified away by investing in both SNC Lavalin 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 SNC Lavalin and Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNC Lavalin Group and Bouygues SA ADR, you can compare the effects of market volatilities on SNC Lavalin 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 SNC Lavalin with a short position of Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNC Lavalin and Bouygues.
Diversification Opportunities for SNC Lavalin and Bouygues
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SNC and Bouygues is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding SNC Lavalin Group and Bouygues SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA ADR and SNC Lavalin 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 SNC Lavalin Group 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 ADR has no effect on the direction of SNC Lavalin i.e., SNC Lavalin and Bouygues go up and down completely randomly.
Pair Corralation between SNC Lavalin and Bouygues
Assuming the 90 days horizon SNC Lavalin Group is expected to generate 1.73 times more return on investment than Bouygues. However, SNC Lavalin is 1.73 times more volatile than Bouygues SA ADR. It trades about 0.11 of its potential returns per unit of risk. Bouygues SA ADR is currently generating about 0.01 per unit of risk. If you would invest 2,030 in SNC Lavalin Group on August 31, 2024 and sell it today you would earn a total of 3,255 from holding SNC Lavalin Group or generate 160.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 85.74% |
| Values | Daily Returns |
SNC Lavalin Group vs. Bouygues SA ADR
Performance |
| Timeline |
| SNC Lavalin Group |
| Bouygues SA ADR |
SNC Lavalin and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNC Lavalin and Bouygues
The main advantage of trading using opposite SNC Lavalin and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNC Lavalin 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.| SNC Lavalin vs. Aecon Group | SNC Lavalin vs. Acciona SA | SNC Lavalin vs. WSP Global | SNC Lavalin vs. SIG Combibloc Group |
| Bouygues vs. SNC Lavalin Group | Bouygues vs. WSP Global | Bouygues vs. Willdan 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |