Correlation Between Hermes International and Dr Ing
Can any of the company-specific risk be diversified away by investing in both Hermes International and Dr Ing 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 Dr Ing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes International SA and Dr Ing hc, you can compare the effects of market volatilities on Hermes International and Dr Ing 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 Dr Ing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes International and Dr Ing.
Diversification Opportunities for Hermes International and Dr Ing
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hermes and DRPRY is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hermes International SA and Dr Ing hc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dr Ing hc 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 SA are associated (or correlated) with Dr Ing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dr Ing hc has no effect on the direction of Hermes International i.e., Hermes International and Dr Ing go up and down completely randomly.
Pair Corralation between Hermes International and Dr Ing
Assuming the 90 days horizon Hermes International SA is expected to generate 0.81 times more return on investment than Dr Ing. However, Hermes International SA is 1.24 times less risky than Dr Ing. It trades about -0.16 of its potential returns per unit of risk. Dr Ing hc is currently generating about -0.32 per unit of risk. If you would invest 23,069 in Hermes International SA on August 29, 2024 and sell it today you would lose (1,549) from holding Hermes International SA or give up 6.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hermes International SA vs. Dr Ing hc
Performance |
| Timeline |
| Hermes International |
| Dr Ing hc |
Hermes International and Dr Ing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hermes International and Dr Ing
The main advantage of trading using opposite Hermes International and Dr Ing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes International position performs unexpectedly, Dr Ing 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 Dr Ing will offset losses from the drop in Dr Ing's long position.| Hermes International vs. LVMH Mot Hennessy | Hermes International vs. Kering SA | Hermes International vs. Capri Holdings | Hermes International vs. Tapestry |
| Dr Ing vs. Copa Holdings SA | Dr Ing vs. United Airlines Holdings | Dr Ing vs. Delta Air Lines | Dr Ing vs. SkyWest |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |