Correlation Between CRAWFORD + and LVMH Mot
Can any of the company-specific risk be diversified away by investing in both CRAWFORD + and LVMH Mot 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 CRAWFORD + and LVMH Mot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRAWFORD A NV and LVMH Mot Hennessy, you can compare the effects of market volatilities on CRAWFORD + and LVMH Mot 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 CRAWFORD + with a short position of LVMH Mot. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRAWFORD + and LVMH Mot.
Diversification Opportunities for CRAWFORD + and LVMH Mot
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CRAWFORD and LVMH is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CRAWFORD A NV and LVMH Mot Hennessy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LVMH Mot Hennessy and CRAWFORD + 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 CRAWFORD A NV are associated (or correlated) with LVMH Mot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LVMH Mot Hennessy has no effect on the direction of CRAWFORD + i.e., CRAWFORD + and LVMH Mot go up and down completely randomly.
Pair Corralation between CRAWFORD + and LVMH Mot
Assuming the 90 days trading horizon CRAWFORD A NV is expected to generate 1.5 times more return on investment than LVMH Mot. However, CRAWFORD + is 1.5 times more volatile than LVMH Mot Hennessy. It trades about 0.06 of its potential returns per unit of risk. LVMH Mot Hennessy is currently generating about -0.01 per unit of risk. If you would invest 535.00 in CRAWFORD A NV on October 14, 2024 and sell it today you would earn a total of 485.00 from holding CRAWFORD A NV or generate 90.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRAWFORD A NV vs. LVMH Mot Hennessy
Performance |
| Timeline |
| CRAWFORD A NV |
| LVMH Mot Hennessy |
CRAWFORD + and LVMH Mot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRAWFORD + and LVMH Mot
The main advantage of trading using opposite CRAWFORD + and LVMH Mot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRAWFORD + position performs unexpectedly, LVMH Mot 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 LVMH Mot will offset losses from the drop in LVMH Mot's long position.| CRAWFORD + vs. Brown Brown | CRAWFORD + vs. Sabre Insurance Group | CRAWFORD + vs. Superior Plus Corp | CRAWFORD + vs. NMI Holdings |
| LVMH Mot vs. LVMH Mot Hennessy | LVMH Mot vs. LVMH Mot Hennessy | LVMH Mot vs. Herms International Socit | LVMH Mot vs. CHRISTIAN DIOR ADR14EO2 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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