Correlation Between Vivendi SA and Compagnie
Can any of the company-specific risk be diversified away by investing in both Vivendi SA and Compagnie 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 Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivendi SA and Compagnie de Saint Gobain, you can compare the effects of market volatilities on Vivendi SA and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivendi SA and Compagnie.
Diversification Opportunities for Vivendi SA and Compagnie
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vivendi and Compagnie is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SA and Compagnie de Saint Gobain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de Saint 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de Saint has no effect on the direction of Vivendi SA i.e., Vivendi SA and Compagnie go up and down completely randomly.
Pair Corralation between Vivendi SA and Compagnie
Assuming the 90 days trading horizon Vivendi SA is expected to generate 1.19 times more return on investment than Compagnie. However, Vivendi SA is 1.19 times more volatile than Compagnie de Saint Gobain. It trades about 0.41 of its potential returns per unit of risk. Compagnie de Saint Gobain is currently generating about 0.3 per unit of risk. If you would invest 255.00 in Vivendi SA on November 18, 2024 and sell it today you would earn a total of 50.00 from holding Vivendi SA or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vivendi SA vs. Compagnie de Saint Gobain
Performance |
| Timeline |
| Vivendi SA |
| Compagnie de Saint |
Vivendi SA and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vivendi SA and Compagnie
The main advantage of trading using opposite Vivendi SA and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivendi SA position performs unexpectedly, Compagnie 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 will offset losses from the drop in Compagnie'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 |
| Compagnie vs. Vinci SA | Compagnie vs. Air Liquide SA | Compagnie vs. Compagnie Generale des | Compagnie vs. Bouygues SA |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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