Correlation Between Arcosa and Getlink SE

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

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

Diversification Opportunities for Arcosa and Getlink SE

-0.39

Correlation Coefficient

Arcosa  Getlink SE

Very good diversification

The 3 months correlation between Arcosa and Getlink is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Arcosa Inc and Getlink SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getlink SE and Arcosa 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 Arcosa Inc are associated (or correlated) with Getlink SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getlink SE has no effect on the direction of Arcosa i.e., Arcosa and Getlink SE go up and down completely randomly.

Pair Corralation between Arcosa and Getlink SE

Assuming the 90 days horizon Arcosa Inc is expected to under-perform the Getlink SE. In addition to that, Arcosa is 1.47 times more volatile than Getlink SE. It trades about -0.18 of its total potential returns per unit of risk. Getlink SE is currently generating about 0.07 per unit of volatility. If you would invest  1,527  in Getlink SE on December 27, 2024 and sell it today you would earn a total of  78.00  from holding Getlink SE or generate 5.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Arcosa Inc  vs.  Getlink SE

Arcosa Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arcosa Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Getlink SE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Getlink SE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Getlink SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Arcosa and Getlink SE

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

The idea behind Arcosa Inc and Getlink 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 Transaction History module to view history of all your transactions and understand their impact on performance.