Correlation Between Adomos SA and Christian Dior
Can any of the company-specific risk be diversified away by investing in both Adomos SA and Christian Dior 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 Adomos SA and Christian Dior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adomos SA and Christian Dior SE, you can compare the effects of market volatilities on Adomos SA and Christian Dior 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 Adomos SA with a short position of Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adomos SA and Christian Dior.
Diversification Opportunities for Adomos SA and Christian Dior
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adomos and Christian is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Adomos SA and Christian Dior SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christian Dior SE and Adomos 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 Adomos SA are associated (or correlated) with Christian Dior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christian Dior SE has no effect on the direction of Adomos SA i.e., Adomos SA and Christian Dior go up and down completely randomly.
Pair Corralation between Adomos SA and Christian Dior
If you would invest 0.02 in Adomos SA on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Adomos SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Adomos SA vs. Christian Dior SE
Performance |
| Timeline |
| Adomos SA |
| Christian Dior SE |
Adomos SA and Christian Dior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adomos SA and Christian Dior
The main advantage of trading using opposite Adomos SA and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adomos SA position performs unexpectedly, Christian Dior 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 Christian Dior will offset losses from the drop in Christian Dior's long position.The idea behind Adomos SA and Christian Dior SE 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.| Christian Dior vs. Hermes International SCA | Christian Dior vs. Kering SA | Christian Dior vs. LOreal SA | Christian Dior vs. Pernod Ricard SA |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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