Correlation Between Vinci SA and Robertet

Can any of the company-specific risk be diversified away by investing in both Vinci SA and Robertet 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 Robertet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vinci SA and Robertet SA, you can compare the effects of market volatilities on Vinci SA and Robertet 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 Robertet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinci SA and Robertet.

Diversification Opportunities for Vinci SA and Robertet

0.68

Correlation Coefficient

Vinci SA  Robertet

Poor diversification

The 3 months correlation between Vinci and Robertet is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Vinci SA and Robertet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robertet 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 Robertet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robertet SA has no effect on the direction of Vinci SA i.e., Vinci SA and Robertet go up and down completely randomly.

Pair Corralation between Vinci SA and Robertet

Assuming the 90 days horizon Vinci SA is expected to generate 1.11 times more return on investment than Robertet. However, Vinci SA is 1.11 times more volatile than Robertet SA. It trades about -0.07 of its potential returns per unit of risk. Robertet SA is currently generating about -0.12 per unit of risk. If you would invest  10,853  in Vinci SA on September 16, 2024 and sell it today you would lose (733.00) from holding Vinci SA or give up 6.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Vinci SA  vs.  Robertet SA

Vinci SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Vinci SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Robertet SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robertet SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Vinci SA and Robertet

The main advantage of trading using opposite Vinci SA and Robertet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci SA position performs unexpectedly, Robertet 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 Robertet will offset losses from the drop in Robertet's long position.

The idea behind Vinci SA and Robertet 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.