Correlation Between Hermes International and Hermes International
Can any of the company-specific risk be diversified away by investing in both Hermes International and Hermes 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 Hermes International and Hermes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes International SCA and Hermes International SA, you can compare the effects of market volatilities on Hermes International and Hermes 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 Hermes International with a short position of Hermes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes International and Hermes International.
Diversification Opportunities for Hermes International and Hermes International
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Hermes and Hermes is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Hermes International SCA and Hermes International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hermes International and Hermes International 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 Hermes International SCA are associated (or correlated) with Hermes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hermes International has no effect on the direction of Hermes International i.e., Hermes International and Hermes International go up and down completely randomly.
Pair Corralation between Hermes International and Hermes International
Assuming the 90 days horizon Hermes International SCA is expected to generate 1.0 times more return on investment than Hermes International. However, Hermes International SCA is 1.0 times less risky than Hermes International. It trades about -0.05 of its potential returns per unit of risk. Hermes International SA is currently generating about -0.06 per unit of risk. If you would invest 237,500 in Hermes International SCA on August 30, 2024 and sell it today you would lose (20,550) from holding Hermes International SCA or give up 8.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hermes International SCA vs. Hermes International SA
Performance |
| Timeline |
| Hermes International SCA |
| Hermes International |
Hermes International and Hermes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hermes International and Hermes International
The main advantage of trading using opposite Hermes International and Hermes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes International position performs unexpectedly, Hermes 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 Hermes International will offset losses from the drop in Hermes International's long position.| Hermes International vs. Christian Dior SE | Hermes International vs. Burberry Group Plc | Hermes International vs. Compagnie Financiere Richemont | Hermes International vs. Hermes International SA |
| Hermes International vs. LVMH Mot Hennessy | Hermes International vs. Kering SA | Hermes International vs. Capri Holdings | Hermes International vs. Tapestry |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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