Correlation Between Christian Dior and ICeram SA
Can any of the company-specific risk be diversified away by investing in both Christian Dior and ICeram 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 Christian Dior and ICeram SA 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 ICeram SA, you can compare the effects of market volatilities on Christian Dior and ICeram 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 Christian Dior with a short position of ICeram SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and ICeram SA.
Diversification Opportunities for Christian Dior and ICeram SA
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Christian and ICeram is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and ICeram SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICeram 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 ICeram SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICeram SA has no effect on the direction of Christian Dior i.e., Christian Dior and ICeram SA go up and down completely randomly.
Pair Corralation between Christian Dior and ICeram SA
Assuming the 90 days trading horizon Christian Dior SE is expected to generate 0.18 times more return on investment than ICeram SA. However, Christian Dior SE is 5.41 times less risky than ICeram SA. It trades about -0.04 of its potential returns per unit of risk. ICeram SA is currently generating about -0.04 per unit of risk. If you would invest 68,058 in Christian Dior SE on September 2, 2024 and sell it today you would lose (12,908) from holding Christian Dior SE or give up 18.97% 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. ICeram SA
Performance |
| Timeline |
| Christian Dior SE |
| ICeram SA |
Christian Dior and ICeram SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christian Dior and ICeram SA
The main advantage of trading using opposite Christian Dior and ICeram SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior position performs unexpectedly, ICeram 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 ICeram SA will offset losses from the drop in ICeram SA'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 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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