Correlation Between Kering SA and Pernod Ricard
Can any of the company-specific risk be diversified away by investing in both Kering SA and Pernod Ricard 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 Kering SA and Pernod Ricard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and Pernod Ricard SA, you can compare the effects of market volatilities on Kering SA and Pernod Ricard 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 Kering SA with a short position of Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and Pernod Ricard.
Diversification Opportunities for Kering SA and Pernod Ricard
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kering and Pernod is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and Pernod Ricard SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pernod Ricard SA and Kering 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 Kering SA are associated (or correlated) with Pernod Ricard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pernod Ricard SA has no effect on the direction of Kering SA i.e., Kering SA and Pernod Ricard go up and down completely randomly.
Pair Corralation between Kering SA and Pernod Ricard
Assuming the 90 days trading horizon Kering SA is expected to generate 1.78 times more return on investment than Pernod Ricard. However, Kering SA is 1.78 times more volatile than Pernod Ricard SA. It trades about -0.11 of its potential returns per unit of risk. Pernod Ricard SA is currently generating about -0.33 per unit of risk. If you would invest 24,080 in Kering SA on August 28, 2024 and sell it today you would lose (1,910) from holding Kering SA or give up 7.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kering SA vs. Pernod Ricard SA
Performance |
| Timeline |
| Kering SA |
| Pernod Ricard SA |
Kering SA and Pernod Ricard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kering SA and Pernod Ricard
The main advantage of trading using opposite Kering SA and Pernod Ricard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA position performs unexpectedly, Pernod Ricard 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 Pernod Ricard will offset losses from the drop in Pernod Ricard's long position.| Kering SA vs. Hermes International SCA | Kering SA vs. LVMH Mot Hennessy | Kering SA vs. LOreal SA | Kering SA vs. Pernod Ricard SA |
| Pernod Ricard vs. LOreal SA | Pernod Ricard vs. Danone SA | Pernod Ricard vs. Compagnie Generale des | Pernod Ricard vs. Air Liquide SA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |