Correlation Between Pandora AS and Hermès International
Can any of the company-specific risk be diversified away by investing in both Pandora AS and Hermès International 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 Pandora AS and Hermès International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pandora AS and Herms International Socit, you can compare the effects of market volatilities on Pandora AS and Hermès International 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 Pandora AS with a short position of Hermès International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pandora AS and Hermès International.
Diversification Opportunities for Pandora AS and Hermès International
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pandora and Hermès is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pandora AS and Herms International Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herms International Socit and Pandora AS 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 Pandora AS are associated (or correlated) with Hermès International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herms International Socit has no effect on the direction of Pandora AS i.e., Pandora AS and Hermès International go up and down completely randomly.
Pair Corralation between Pandora AS and Hermès International
Assuming the 90 days horizon Pandora AS is expected to generate 1.01 times more return on investment than Hermès International. However, Pandora AS is 1.01 times more volatile than Herms International Socit. It trades about 0.19 of its potential returns per unit of risk. Herms International Socit is currently generating about 0.11 per unit of risk. If you would invest 14,260 in Pandora AS on October 14, 2024 and sell it today you would earn a total of 3,365 from holding Pandora AS or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pandora AS vs. Herms International Socit
Performance |
| Timeline |
| Pandora AS |
| Herms International Socit |
Pandora AS and Hermès International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pandora AS and Hermès International
The main advantage of trading using opposite Pandora AS and Hermès International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pandora AS position performs unexpectedly, Hermès International 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 Hermès International will offset losses from the drop in Hermès International's long position.| Pandora AS vs. Performance Food Group | Pandora AS vs. RYU Apparel | Pandora AS vs. EBRO FOODS | Pandora AS vs. JAPAN TOBACCO UNSPADR12 |
| Hermès International vs. LVMH Mot Hennessy | Hermès International vs. LVMH Mot Hennessy | Hermès International vs. Christian Dior SE | Hermès International vs. Compagnie Financire Richemont |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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