Correlation Between VINCI SA and Bouygues
Can any of the company-specific risk be diversified away by investing in both VINCI SA and Bouygues 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 Bouygues into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VINCI SA and Bouygues SA, you can compare the effects of market volatilities on VINCI SA and Bouygues 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 Bouygues. Check out your portfolio center. Please also check ongoing floating volatility patterns of VINCI SA and Bouygues.
Diversification Opportunities for VINCI SA and Bouygues
Good diversification
The 3 months correlation between VINCI and Bouygues is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding VINCI SA and Bouygues SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bouygues SA 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 are associated (or correlated) with Bouygues. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bouygues SA has no effect on the direction of VINCI SA i.e., VINCI SA and Bouygues go up and down completely randomly.
Pair Corralation between VINCI SA and Bouygues
Assuming the 90 days horizon VINCI SA is expected to under-perform the Bouygues. But the pink sheet apears to be less risky and, when comparing its historical volatility, VINCI SA is 1.18 times less risky than Bouygues. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Bouygues SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,860 in Bouygues SA on January 24, 2024 and sell it today you would earn a total of 140.00 from holding Bouygues SA or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VINCI SA vs. Bouygues SA
Performance |
| Timeline |
| VINCI SA |
| Bouygues SA |
VINCI SA and Bouygues Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VINCI SA and Bouygues
The main advantage of trading using opposite VINCI SA and Bouygues positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VINCI SA position performs unexpectedly, Bouygues 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 Bouygues will offset losses from the drop in Bouygues' long position.| VINCI SA vs. Arcadis NV | VINCI SA vs. KBR Inc | VINCI SA vs. Orion Group Holdings | VINCI SA vs. Jacobs Solutions |
| Bouygues vs. Arcadis NV | Bouygues vs. KBR Inc | Bouygues vs. Orion Group Holdings | Bouygues vs. Jacobs Solutions |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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