Correlation Between Christian Dior and Europlasma
Can any of the company-specific risk be diversified away by investing in both Christian Dior and Europlasma 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 Christian Dior and Europlasma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Christian Dior SE and Europlasma SA, you can compare the effects of market volatilities on Christian Dior and Europlasma 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 Christian Dior with a short position of Europlasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and Europlasma.
Diversification Opportunities for Christian Dior and Europlasma
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Christian and Europlasma is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and Europlasma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europlasma SA and Christian Dior 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 Christian Dior SE are associated (or correlated) with Europlasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europlasma SA has no effect on the direction of Christian Dior i.e., Christian Dior and Europlasma go up and down completely randomly.
Pair Corralation between Christian Dior and Europlasma
Assuming the 90 days trading horizon Christian Dior SE is expected to generate 0.2 times more return on investment than Europlasma. However, Christian Dior SE is 5.11 times less risky than Europlasma. It trades about -0.05 of its potential returns per unit of risk. Europlasma SA is currently generating about -0.22 per unit of risk. If you would invest 58,300 in Christian Dior SE on August 26, 2024 and sell it today you would lose (3,450) from holding Christian Dior SE or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Christian Dior SE vs. Europlasma SA
Performance |
| Timeline |
| Christian Dior SE |
| Europlasma SA |
Christian Dior and Europlasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christian Dior and Europlasma
The main advantage of trading using opposite Christian Dior and Europlasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior position performs unexpectedly, Europlasma 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 Europlasma will offset losses from the drop in Europlasma's long position.| Christian Dior vs. Hermes International SCA | Christian Dior vs. Kering SA | Christian Dior vs. LOreal SA | Christian Dior vs. Pernod Ricard SA |
| Europlasma vs. Prodways Group SA | Europlasma vs. Claranova SE | Europlasma vs. DBV Technologies SA | Europlasma vs. Manitou BF 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 Stocks Directory module to find actively traded stocks across global markets.
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