Correlation Between ACS Actividades and Legrand SA
Can any of the company-specific risk be diversified away by investing in both ACS Actividades and Legrand SA 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 ACS Actividades and Legrand SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACS Actividades De and Legrand SA, you can compare the effects of market volatilities on ACS Actividades and Legrand SA 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 ACS Actividades with a short position of Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACS Actividades and Legrand SA.
Diversification Opportunities for ACS Actividades and Legrand SA
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ACS and Legrand is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ACS Actividades De and Legrand SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA and ACS Actividades 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 ACS Actividades De are associated (or correlated) with Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA has no effect on the direction of ACS Actividades i.e., ACS Actividades and Legrand SA go up and down completely randomly.
Pair Corralation between ACS Actividades and Legrand SA
Assuming the 90 days horizon ACS Actividades De is expected to generate 0.63 times more return on investment than Legrand SA. However, ACS Actividades De is 1.59 times less risky than Legrand SA. It trades about 0.19 of its potential returns per unit of risk. Legrand SA is currently generating about 0.02 per unit of risk. If you would invest 1,523 in ACS Actividades De on August 14, 2025 and sell it today you would earn a total of 272.00 from holding ACS Actividades De or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACS Actividades De vs. Legrand SA
Performance |
| Timeline |
| ACS Actividades De |
| Legrand SA |
ACS Actividades and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACS Actividades and Legrand SA
The main advantage of trading using opposite ACS Actividades and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACS Actividades position performs unexpectedly, Legrand SA 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 Legrand SA will offset losses from the drop in Legrand SA's long position.| ACS Actividades vs. Bouygues SA ADR | ACS Actividades vs. VINCI SA | ACS Actividades vs. Vinci SA ADR | ACS Actividades vs. Wartsila Oyj Abp |
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Check out your portfolio center.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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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