Correlation Between Vinci SA and Compagnie Generale
Can any of the company-specific risk be diversified away by investing in both Vinci SA and Compagnie Generale 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 Vinci SA and Compagnie Generale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vinci SA ADR and Compagnie Generale des, you can compare the effects of market volatilities on Vinci SA and Compagnie Generale 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 Vinci SA with a short position of Compagnie Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci SA and Compagnie Generale.
Diversification Opportunities for Vinci SA and Compagnie Generale
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vinci and Compagnie is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA ADR and Compagnie Generale des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Generale des and Vinci SA 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 Vinci SA ADR are associated (or correlated) with Compagnie Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Generale des has no effect on the direction of Vinci SA i.e., Vinci SA and Compagnie Generale go up and down completely randomly.
Pair Corralation between Vinci SA and Compagnie Generale
Assuming the 90 days horizon Vinci SA ADR is expected to under-perform the Compagnie Generale. In addition to that, Vinci SA is 1.24 times more volatile than Compagnie Generale des. It trades about -0.04 of its total potential returns per unit of risk. Compagnie Generale des is currently generating about 0.06 per unit of volatility. If you would invest 1,673 in Compagnie Generale des on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Compagnie Generale des or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vinci SA ADR vs. Compagnie Generale des
Performance |
| Timeline |
| Vinci SA ADR |
| Compagnie Generale des |
Vinci SA and Compagnie Generale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vinci SA and Compagnie Generale
The main advantage of trading using opposite Vinci SA and Compagnie Generale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci SA position performs unexpectedly, Compagnie Generale 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 Compagnie Generale will offset losses from the drop in Compagnie Generale's long position.| Vinci SA vs. Arcadis NV | Vinci SA vs. KBR Inc | Vinci SA vs. Orion Group Holdings | Vinci SA vs. Jacobs Solutions |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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