Correlation Between SNC Lavalin and Comfort Systems
Can any of the company-specific risk be diversified away by investing in both SNC Lavalin and Comfort Systems 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 Comfort Systems 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 Comfort Systems USA, you can compare the effects of market volatilities on SNC Lavalin and Comfort Systems 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 Comfort Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNC Lavalin and Comfort Systems.
Diversification Opportunities for SNC Lavalin and Comfort Systems
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SNC and Comfort is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SNC Lavalin Group and Comfort Systems USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comfort Systems USA 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 Comfort Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comfort Systems USA has no effect on the direction of SNC Lavalin i.e., SNC Lavalin and Comfort Systems go up and down completely randomly.
Pair Corralation between SNC Lavalin and Comfort Systems
Assuming the 90 days horizon SNC Lavalin is expected to generate 35.22 times less return on investment than Comfort Systems. But when comparing it to its historical volatility, SNC Lavalin Group is 2.23 times less risky than Comfort Systems. It trades about 0.03 of its potential returns per unit of risk. Comfort Systems USA is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 43,500 in Comfort Systems USA on October 24, 2024 and sell it today you would earn a total of 9,422 from holding Comfort Systems USA or generate 21.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNC Lavalin Group vs. Comfort Systems USA
Performance |
| Timeline |
| SNC Lavalin Group |
| Comfort Systems USA |
SNC Lavalin and Comfort Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNC Lavalin and Comfort Systems
The main advantage of trading using opposite SNC Lavalin and Comfort Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNC Lavalin position performs unexpectedly, Comfort Systems 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 Comfort Systems will offset losses from the drop in Comfort Systems' long position.| SNC Lavalin vs. Aecon Group | SNC Lavalin vs. Acciona SA | SNC Lavalin vs. WSP Global | SNC Lavalin vs. SIG Combibloc Group |
| Comfort Systems vs. MYR Group | Comfort Systems vs. Granite Construction Incorporated | Comfort Systems vs. Dycom Industries | Comfort Systems vs. MasTec Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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