Correlation Between Stellar and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Stellar and Eiffage 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 Stellar and Eiffage SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Eiffage SA, you can compare the effects of market volatilities on Stellar and Eiffage 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 Stellar with a short position of Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Eiffage SA.
Diversification Opportunities for Stellar and Eiffage SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stellar and Eiffage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA and Stellar 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 Stellar are associated (or correlated) with Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA has no effect on the direction of Stellar i.e., Stellar and Eiffage SA go up and down completely randomly.
Pair Corralation between Stellar and Eiffage SA
Assuming the 90 days trading horizon Stellar is expected to generate 3.8 times more return on investment than Eiffage SA. However, Stellar is 3.8 times more volatile than Eiffage SA. It trades about 0.1 of its potential returns per unit of risk. Eiffage SA is currently generating about 0.02 per unit of risk. If you would invest 8.60 in Stellar on November 2, 2024 and sell it today you would earn a total of 34.40 from holding Stellar or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 65.66% |
| Values | Daily Returns |
Stellar vs. Eiffage SA
Performance |
| Timeline |
| Stellar |
| Eiffage SA |
Stellar and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Eiffage SA
The main advantage of trading using opposite Stellar and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Eiffage 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.The idea behind Stellar and Eiffage SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Eiffage SA vs. Concrete Pumping Holdings | Eiffage SA vs. Orion Group Holdings | Eiffage SA vs. Matrix Service Co | Eiffage SA vs. Limbach Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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