Correlation Between Danone SA and Vitasoy International
Can any of the company-specific risk be diversified away by investing in both Danone SA and Vitasoy International 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 Danone SA and Vitasoy International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danone SA and Vitasoy International Holdings, you can compare the effects of market volatilities on Danone SA and Vitasoy International 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 Danone SA with a short position of Vitasoy International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danone SA and Vitasoy International.
Diversification Opportunities for Danone SA and Vitasoy International
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Danone and Vitasoy is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Danone SA and Vitasoy International Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitasoy International and Danone SA 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 Danone SA are associated (or correlated) with Vitasoy International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitasoy International has no effect on the direction of Danone SA i.e., Danone SA and Vitasoy International go up and down completely randomly.
Pair Corralation between Danone SA and Vitasoy International
Assuming the 90 days horizon Danone SA is expected to generate 0.65 times more return on investment than Vitasoy International. However, Danone SA is 1.53 times less risky than Vitasoy International. It trades about 0.04 of its potential returns per unit of risk. Vitasoy International Holdings is currently generating about -0.06 per unit of risk. If you would invest 4,877 in Danone SA on September 13, 2024 and sell it today you would earn a total of 1,908 from holding Danone SA or generate 39.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.56% |
| Values | Daily Returns |
Danone SA vs. Vitasoy International Holdings
Performance |
| Timeline |
| Danone SA |
| Vitasoy International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Danone SA and Vitasoy International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danone SA and Vitasoy International
The main advantage of trading using opposite Danone SA and Vitasoy International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danone SA position performs unexpectedly, Vitasoy International 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 Vitasoy International will offset losses from the drop in Vitasoy International's long position.| Danone SA vs. BRF SA ADR | Danone SA vs. Pilgrims Pride Corp | Danone SA vs. John B Sanfilippo | Danone SA vs. Seneca Foods Corp |
| Vitasoy International vs. Premier Foods Plc | Vitasoy International vs. Torque Lifestyle Brands | Vitasoy International vs. Naturally Splendid Enterprises | Vitasoy International vs. Aryzta AG PK |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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