Correlation Between Bouygues and Fill Up

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

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

Diversification Opportunities for Bouygues and Fill Up

0.11

Correlation Coefficient

Bouygues  Fill Up

Average diversification

The 3 months correlation between Bouygues and Fill is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bouygues SA and Fill Up Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fill Up Media 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 Fill Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fill Up Media has no effect on the direction of Bouygues i.e., Bouygues and Fill Up go up and down completely randomly.

Pair Corralation between Bouygues and Fill Up

Assuming the 90 days horizon Bouygues SA is expected to under-perform the Fill Up. But the stock apears to be less risky and, when comparing its historical volatility, Bouygues SA is 1.27 times less risky than Fill Up. The stock trades about -0.11 of its potential returns per unit of risk. The Fill Up Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  625.00  in Fill Up Media on September 15, 2024 and sell it today you would earn a total of  20.00  from holding Fill Up Media or generate 3.2% return on investment over 90 days.

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

Bouygues SA  vs.  Fill Up Media

Bouygues SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bouygues 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.

Fill Up Media

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fill Up Media are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Fill Up is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bouygues and Fill Up

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

The idea behind Bouygues SA and Fill Up Media 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.