Correlation Between Christian Dior and Remy Cointreau
Can any of the company-specific risk be diversified away by investing in both Christian Dior and Remy Cointreau 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 Remy Cointreau 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 Remy Cointreau, you can compare the effects of market volatilities on Christian Dior and Remy Cointreau 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 Remy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and Remy Cointreau.
Diversification Opportunities for Christian Dior and Remy Cointreau
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Christian and Remy is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and Remy Cointreau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remy Cointreau 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 Remy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remy Cointreau has no effect on the direction of Christian Dior i.e., Christian Dior and Remy Cointreau go up and down completely randomly.
Pair Corralation between Christian Dior and Remy Cointreau
Assuming the 90 days trading horizon Christian Dior SE is expected to under-perform the Remy Cointreau. But the stock apears to be less risky and, when comparing its historical volatility, Christian Dior SE is 1.29 times less risky than Remy Cointreau. The stock trades about -0.19 of its potential returns per unit of risk. The Remy Cointreau is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 5,995 in Remy Cointreau on August 27, 2024 and sell it today you would lose (170.00) from holding Remy Cointreau or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Christian Dior SE vs. Remy Cointreau
Performance |
| Timeline |
| Christian Dior SE |
| Remy Cointreau |
Christian Dior and Remy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christian Dior and Remy Cointreau
The main advantage of trading using opposite Christian Dior and Remy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior position performs unexpectedly, Remy Cointreau 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 Remy Cointreau will offset losses from the drop in Remy Cointreau's long position.| Christian Dior vs. FIPP SA | Christian Dior vs. Adomos SA | Christian Dior vs. Acanthe Dveloppement | Christian Dior vs. Acheter Louer |
| Remy Cointreau vs. Robertet SA | Remy Cointreau vs. Virbac SA | Remy Cointreau vs. Thermador Groupe SA | Remy Cointreau vs. Elis 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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