Correlation Between Vinci SA and Ferrovial

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

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

Diversification Opportunities for Vinci SA and Ferrovial

0.0

Correlation Coefficient

Vinci SA  Ferrovial

Pay attention - limited upside

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

Pair Corralation between Vinci SA and Ferrovial

If you would invest  2,552  in Vinci SA ADR on December 22, 2024 and sell it today you would earn a total of  646.00  from holding Vinci SA ADR or generate 25.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Vinci SA ADR  vs.  Ferrovial SA

Vinci SA ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vinci SA ADR are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Vinci SA showed solid returns over the last few months and may actually be approaching a breakup point.

Ferrovial SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Vinci SA and Ferrovial

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

The idea behind Vinci SA ADR and Ferrovial 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.