Correlation Between Christian Dior and Neoen SA
Can any of the company-specific risk be diversified away by investing in both Christian Dior and Neoen 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 Neoen 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 Neoen SA, you can compare the effects of market volatilities on Christian Dior and Neoen 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 Neoen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and Neoen SA.
Diversification Opportunities for Christian Dior and Neoen SA
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Christian and Neoen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and Neoen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neoen 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 Neoen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neoen SA has no effect on the direction of Christian Dior i.e., Christian Dior and Neoen SA go up and down completely randomly.
Pair Corralation between Christian Dior and Neoen SA
Assuming the 90 days trading horizon Christian Dior SE is expected to under-perform the Neoen SA. But the stock apears to be less risky and, when comparing its historical volatility, Christian Dior SE is 1.12 times less risky than Neoen SA. The stock trades about -0.05 of its potential returns per unit of risk. The Neoen SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,786 in Neoen SA on August 27, 2024 and sell it today you would earn a total of 1,159 from holding Neoen SA or generate 41.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Christian Dior SE vs. Neoen SA
Performance |
| Timeline |
| Christian Dior SE |
| Neoen SA |
Christian Dior and Neoen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christian Dior and Neoen SA
The main advantage of trading using opposite Christian Dior and Neoen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior position performs unexpectedly, Neoen 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 Neoen SA will offset losses from the drop in Neoen 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 |
| Neoen SA vs. Voltalia SA | Neoen SA vs. Gaztransport Technigaz SAS | Neoen SA vs. Worldline SA | Neoen SA vs. Rubis SCA |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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