Correlation Between Crimson Wine and Pernod Ricard
Can any of the company-specific risk be diversified away by investing in both Crimson Wine and Pernod Ricard 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 Crimson Wine and Pernod Ricard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crimson Wine and Pernod Ricard SA, you can compare the effects of market volatilities on Crimson Wine and Pernod Ricard 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 Crimson Wine with a short position of Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crimson Wine and Pernod Ricard.
Diversification Opportunities for Crimson Wine and Pernod Ricard
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crimson and Pernod is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Crimson Wine and Pernod Ricard SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pernod Ricard SA and Crimson Wine 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 Crimson Wine are associated (or correlated) with Pernod Ricard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pernod Ricard SA has no effect on the direction of Crimson Wine i.e., Crimson Wine and Pernod Ricard go up and down completely randomly.
Pair Corralation between Crimson Wine and Pernod Ricard
Given the investment horizon of 90 days Crimson Wine is expected to generate 0.8 times more return on investment than Pernod Ricard. However, Crimson Wine is 1.25 times less risky than Pernod Ricard. It trades about 0.09 of its potential returns per unit of risk. Pernod Ricard SA is currently generating about -0.13 per unit of risk. If you would invest 584.00 in Crimson Wine on August 28, 2024 and sell it today you would earn a total of 71.00 from holding Crimson Wine or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crimson Wine vs. Pernod Ricard SA
Performance |
| Timeline |
| Crimson Wine |
| Pernod Ricard SA |
Crimson Wine and Pernod Ricard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crimson Wine and Pernod Ricard
The main advantage of trading using opposite Crimson Wine and Pernod Ricard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crimson Wine position performs unexpectedly, Pernod Ricard 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 Pernod Ricard will offset losses from the drop in Pernod Ricard's long position.| Crimson Wine vs. Embotelladora Andina SA | Crimson Wine vs. Signet International Holdings | Crimson Wine vs. National Beverage Corp | Crimson Wine vs. PT Astra International |
| Pernod Ricard vs. Remy Cointreau SA | Pernod Ricard vs. Treasury Wine Estates | Pernod Ricard vs. MGP Ingredients | Pernod Ricard vs. Naked Wines plc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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