Correlation Between Bouygues and Atos SE

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

By analyzing existing cross correlation between Bouygues SA and Atos SE, you can compare the effects of market volatilities on Bouygues and Atos SE 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 Bouygues with a short position of Atos SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bouygues and Atos SE.

Diversification Opportunities for Bouygues and Atos SE

0.9

Correlation Coefficient

Bouygues  Atos SE

Almost no diversification

The 3 months correlation between Bouygues and Atos is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bouygues SA and Atos SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atos SE and Bouygues 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 Bouygues SA are associated (or correlated) with Atos SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atos SE has no effect on the direction of Bouygues i.e., Bouygues and Atos SE go up and down completely randomly.

Pair Corralation between Bouygues and Atos SE

Assuming the 90 days horizon Bouygues is expected to generate 2.29 times less return on investment than Atos SE. But when comparing it to its historical volatility, Bouygues SA is 5.89 times less risky than Atos SE. It trades about 0.37 of its potential returns per unit of risk. Atos SE is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.25  in Atos SE on December 30, 2024 and sell it today you would earn a total of  0.15  from holding Atos SE or generate 60.0% return on investment over 90 days.

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

Bouygues SA  vs.  Atos SE

Bouygues SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Bouygues SA are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bouygues sustained solid returns over the last few months and may actually be approaching a breakup point.

Atos SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Atos SE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Atos SE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bouygues and Atos SE

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

The idea behind Bouygues SA and Atos SE 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.