Correlation Between Guerbet S and Remy Cointreau
Can any of the company-specific risk be diversified away by investing in both Guerbet S and Remy Cointreau 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 Guerbet S and Remy Cointreau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guerbet S A and Remy Cointreau, you can compare the effects of market volatilities on Guerbet S and Remy Cointreau 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 Guerbet S with a short position of Remy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guerbet S and Remy Cointreau.
Diversification Opportunities for Guerbet S and Remy Cointreau
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guerbet and Remy is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Guerbet S A and Remy Cointreau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remy Cointreau and Guerbet S 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 Guerbet S A are associated (or correlated) with Remy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remy Cointreau has no effect on the direction of Guerbet S i.e., Guerbet S and Remy Cointreau go up and down completely randomly.
Pair Corralation between Guerbet S and Remy Cointreau
Assuming the 90 days trading horizon Guerbet S A is expected to under-perform the Remy Cointreau. In addition to that, Guerbet S is 1.24 times more volatile than Remy Cointreau. It trades about -0.41 of its total potential returns per unit of risk. Remy Cointreau is currently generating about -0.17 per unit of volatility. If you would invest 6,025 in Remy Cointreau on August 26, 2024 and sell it today you would lose (460.00) from holding Remy Cointreau or give up 7.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guerbet S A vs. Remy Cointreau
Performance |
| Timeline |
| Guerbet S A |
| Remy Cointreau |
Guerbet S and Remy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guerbet S and Remy Cointreau
The main advantage of trading using opposite Guerbet S and Remy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guerbet S position performs unexpectedly, Remy Cointreau 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 Remy Cointreau will offset losses from the drop in Remy Cointreau's long position.The idea behind Guerbet S A and Remy Cointreau pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Remy Cointreau vs. Pernod Ricard SA | Remy Cointreau vs. SEB SA | Remy Cointreau vs. Sodexo SA | Remy Cointreau vs. Wendel |
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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