Correlation Between Vivendi SA and Engie SA
Can any of the company-specific risk be diversified away by investing in both Vivendi SA and Engie 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 Vivendi SA and Engie SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivendi SA and Engie SA, you can compare the effects of market volatilities on Vivendi SA and Engie 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 Vivendi SA with a short position of Engie SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivendi SA and Engie SA.
Diversification Opportunities for Vivendi SA and Engie SA
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vivendi and Engie is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SA and Engie SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engie SA and Vivendi 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 Vivendi SA are associated (or correlated) with Engie SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engie SA has no effect on the direction of Vivendi SA i.e., Vivendi SA and Engie SA go up and down completely randomly.
Pair Corralation between Vivendi SA and Engie SA
Assuming the 90 days trading horizon Vivendi SA is expected to under-perform the Engie SA. In addition to that, Vivendi SA is 2.54 times more volatile than Engie SA. It trades about -0.53 of its total potential returns per unit of risk. Engie SA is currently generating about -0.14 per unit of volatility. If you would invest 1,575 in Engie SA on August 24, 2024 and sell it today you would lose (28.00) from holding Engie SA or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vivendi SA vs. Engie SA
Performance |
| Timeline |
| Vivendi SA |
| Engie SA |
Vivendi SA and Engie SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vivendi SA and Engie SA
The main advantage of trading using opposite Vivendi SA and Engie SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivendi SA position performs unexpectedly, Engie 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 Engie SA will offset losses from the drop in Engie SA's long position.| Vivendi SA vs. Vinci SA | Vivendi SA vs. Compagnie de Saint Gobain | Vivendi SA vs. Bouygues SA | Vivendi SA vs. Carrefour SA |
| Engie SA vs. Orange SA | Engie SA vs. Veolia Environnement VE | Engie SA vs. AXA SA | Engie SA vs. TotalEnergies SE |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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