Correlation Between Christian Dior and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both Christian Dior and Vivendi 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 Vivendi 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 Vivendi SA, you can compare the effects of market volatilities on Christian Dior and Vivendi 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 Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and Vivendi SA.
Diversification Opportunities for Christian Dior and Vivendi SA
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Christian and Vivendi is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi 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 Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of Christian Dior i.e., Christian Dior and Vivendi SA go up and down completely randomly.
Pair Corralation between Christian Dior and Vivendi SA
Assuming the 90 days trading horizon Christian Dior SE is expected to generate 1.74 times more return on investment than Vivendi SA. However, Christian Dior is 1.74 times more volatile than Vivendi SA. It trades about -0.07 of its potential returns per unit of risk. Vivendi SA is currently generating about -0.14 per unit of risk. If you would invest 62,050 in Christian Dior SE on August 28, 2024 and sell it today you would lose (6,600) from holding Christian Dior SE or give up 10.64% 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. Vivendi SA
Performance |
| Timeline |
| Christian Dior SE |
| Vivendi SA |
Christian Dior and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christian Dior and Vivendi SA
The main advantage of trading using opposite Christian Dior and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior position performs unexpectedly, Vivendi 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 Vivendi SA will offset losses from the drop in Vivendi SA's long position.| Christian Dior vs. FIPP SA | Christian Dior vs. Adomos SA | Christian Dior vs. Acanthe Dveloppement | Christian Dior vs. Acheter Louer |
| Vivendi SA vs. Vallourec | Vivendi SA vs. Genfit | Vivendi SA vs. Innate Pharma | Vivendi SA vs. Etablissements Maurel et |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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