Correlation Between American Public and Pernod Ricard
Can any of the company-specific risk be diversified away by investing in both American Public and Pernod Ricard 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 American Public and Pernod Ricard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and Pernod Ricard SA, you can compare the effects of market volatilities on American Public and Pernod Ricard 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 American Public with a short position of Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and Pernod Ricard.
Diversification Opportunities for American Public and Pernod Ricard
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Pernod is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and Pernod Ricard SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pernod Ricard SA and American Public 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 American Public Education are associated (or correlated) with Pernod Ricard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pernod Ricard SA has no effect on the direction of American Public i.e., American Public and Pernod Ricard go up and down completely randomly.
Pair Corralation between American Public and Pernod Ricard
Assuming the 90 days horizon American Public Education is expected to generate 1.35 times more return on investment than Pernod Ricard. However, American Public is 1.35 times more volatile than Pernod Ricard SA. It trades about 0.06 of its potential returns per unit of risk. Pernod Ricard SA is currently generating about 0.05 per unit of risk. If you would invest 2,040 in American Public Education on November 3, 2024 and sell it today you would earn a total of 60.00 from holding American Public Education or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. Pernod Ricard SA
Performance |
| Timeline |
| American Public Education |
| Pernod Ricard SA |
American Public and Pernod Ricard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and Pernod Ricard
The main advantage of trading using opposite American Public and Pernod Ricard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public position performs unexpectedly, Pernod Ricard 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 Pernod Ricard will offset losses from the drop in Pernod Ricard's long position.| American Public vs. Singapore Telecommunications Limited | American Public vs. ecotel communication ag | American Public vs. IDP EDUCATION LTD | American Public vs. COMBA TELECOM SYST |
| Pernod Ricard vs. UNIQA INSURANCE GR | Pernod Ricard vs. AIR LIQUIDE ADR | Pernod Ricard vs. Norwegian Air Shuttle | Pernod Ricard vs. SEALED AIR |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |