Correlation Between Christian Dior and Kering SA
Can any of the company-specific risk be diversified away by investing in both Christian Dior and Kering 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 Kering 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 Kering SA, you can compare the effects of market volatilities on Christian Dior and Kering 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and Kering SA.
Diversification Opportunities for Christian Dior and Kering SA
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Christian and Kering is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Christian Dior i.e., Christian Dior and Kering SA go up and down completely randomly.
Pair Corralation between Christian Dior and Kering SA
Assuming the 90 days horizon Christian Dior SE is expected to generate 1.19 times more return on investment than Kering SA. However, Christian Dior is 1.19 times more volatile than Kering SA. It trades about 0.26 of its potential returns per unit of risk. Kering SA is currently generating about 0.15 per unit of risk. If you would invest 14,658 in Christian Dior SE on November 3, 2024 and sell it today you would earn a total of 2,867 from holding Christian Dior SE or generate 19.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Christian Dior SE vs. Kering SA
Performance |
| Timeline |
| Christian Dior SE |
| Kering SA |
Christian Dior and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christian Dior and Kering SA
The main advantage of trading using opposite Christian Dior and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior position performs unexpectedly, Kering 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 Kering SA will offset losses from the drop in Kering SA's long position.| Christian Dior vs. Kering SA | Christian Dior vs. Compagnie Financire Richemont | Christian Dior vs. Prada SpA | Christian Dior vs. Compagnie Financiere Richemont |
| Kering SA vs. Burberry Group Plc | Kering SA vs. Swatch Group AG | Kering SA vs. Prada Spa PK | Kering SA vs. Compagnie Financire Richemont |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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