Correlation Between Christian Dior and Pandora A/S
Can any of the company-specific risk be diversified away by investing in both Christian Dior and Pandora A/S 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 Pandora A/S 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 Pandora AS, you can compare the effects of market volatilities on Christian Dior and Pandora A/S 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 Pandora A/S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and Pandora A/S.
Diversification Opportunities for Christian Dior and Pandora A/S
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Christian and Pandora is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora A/S 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 Pandora A/S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora A/S has no effect on the direction of Christian Dior i.e., Christian Dior and Pandora A/S go up and down completely randomly.
Pair Corralation between Christian Dior and Pandora A/S
Assuming the 90 days horizon Christian Dior is expected to generate 13.91 times less return on investment than Pandora A/S. But when comparing it to its historical volatility, Christian Dior SE is 1.09 times less risky than Pandora A/S. It trades about 0.02 of its potential returns per unit of risk. Pandora AS is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 13,990 in Pandora AS on September 26, 2024 and sell it today you would earn a total of 3,420 from holding Pandora AS or generate 24.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Christian Dior SE vs. Pandora AS
Performance |
| Timeline |
| Christian Dior SE |
| Pandora A/S |
Christian Dior and Pandora A/S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Christian Dior and Pandora A/S
The main advantage of trading using opposite Christian Dior and Pandora A/S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior position performs unexpectedly, Pandora A/S 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 Pandora A/S will offset losses from the drop in Pandora A/S's long position.| Christian Dior vs. LVMH Mot Hennessy | Christian Dior vs. Herms International Socit | Christian Dior vs. CHRISTIAN DIOR ADR14EO2 | Christian Dior vs. The Swatch Group |
| Pandora A/S vs. LVMH Mot Hennessy | Pandora A/S vs. Herms International Socit | Pandora A/S vs. CHRISTIAN DIOR ADR14EO2 | Pandora A/S vs. Christian Dior SE |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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