Correlation Between Fomento De and Veolia Environnement

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Can any of the company-specific risk be diversified away by investing in both Fomento De and Veolia Environnement 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 Fomento De and Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fomento De Construcciones and Veolia Environnement SA, you can compare the effects of market volatilities on Fomento De and Veolia Environnement 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 Fomento De with a short position of Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento De and Veolia Environnement.

Diversification Opportunities for Fomento De and Veolia Environnement

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Fomento and Veolia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fomento De Construcciones and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement and Fomento De 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 Fomento De Construcciones are associated (or correlated) with Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Fomento De i.e., Fomento De and Veolia Environnement go up and down completely randomly.

Pair Corralation between Fomento De and Veolia Environnement

If you would invest  188.00  in Fomento De Construcciones on December 29, 2023 and sell it today you would earn a total of  0.00  from holding Fomento De Construcciones or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Fomento De Construcciones  vs.  Veolia Environnement SA

 Performance 
       Timeline  
Fomento De Construcciones 

Risk-Adjusted Performance

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Over the last 90 days Fomento De Construcciones has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Fomento De is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Veolia Environnement 

Risk-Adjusted Performance

4 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Veolia Environnement SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Veolia Environnement is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fomento De and Veolia Environnement Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fomento De and Veolia Environnement

The main advantage of trading using opposite Fomento De and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento De position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.
The idea behind Fomento De Construcciones and Veolia Environnement 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.
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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