Correlation Between Herms International and Compagnie Financire
Can any of the company-specific risk be diversified away by investing in both Herms International and Compagnie Financire 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 Herms International and Compagnie Financire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herms International Socit and Compagnie Financire Richemont, you can compare the effects of market volatilities on Herms International and Compagnie Financire 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 Herms International with a short position of Compagnie Financire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herms International and Compagnie Financire.
Diversification Opportunities for Herms International and Compagnie Financire
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Herms and Compagnie is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Herms International Socit and Compagnie Financire Richemont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Financire and Herms 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 Herms International Socit are associated (or correlated) with Compagnie Financire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Financire has no effect on the direction of Herms International i.e., Herms International and Compagnie Financire go up and down completely randomly.
Pair Corralation between Herms International and Compagnie Financire
Assuming the 90 days horizon Herms International Socit is expected to generate 0.62 times more return on investment than Compagnie Financire. However, Herms International Socit is 1.61 times less risky than Compagnie Financire. It trades about 0.06 of its potential returns per unit of risk. Compagnie Financire Richemont is currently generating about 0.03 per unit of risk. If you would invest 170,704 in Herms International Socit on October 28, 2024 and sell it today you would earn a total of 95,296 from holding Herms International Socit or generate 55.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Herms International Socit vs. Compagnie Financire Richemont
Performance |
| Timeline |
| Herms International Socit |
| Compagnie Financire |
Herms International and Compagnie Financire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herms International and Compagnie Financire
The main advantage of trading using opposite Herms International and Compagnie Financire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herms International position performs unexpectedly, Compagnie Financire 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 Compagnie Financire will offset losses from the drop in Compagnie Financire's long position.| Herms International vs. Hua Hong Semiconductor | Herms International vs. BE Semiconductor Industries | Herms International vs. GAMESTOP | Herms International vs. GameStop Corp |
| Compagnie Financire vs. Pebblebrook Hotel Trust | Compagnie Financire vs. TYSON FOODS A | Compagnie Financire vs. DALATA HOTEL | Compagnie Financire vs. Summit Hotel Properties |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |