Correlation Between Lanvin Group and Prada SpA
Can any of the company-specific risk be diversified away by investing in both Lanvin Group and Prada SpA 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 Lanvin Group and Prada SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lanvin Group Holdings and Prada SpA, you can compare the effects of market volatilities on Lanvin Group and Prada SpA 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 Lanvin Group with a short position of Prada SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanvin Group and Prada SpA.
Diversification Opportunities for Lanvin Group and Prada SpA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lanvin and Prada is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lanvin Group Holdings and Prada SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prada SpA and Lanvin Group 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 Lanvin Group Holdings are associated (or correlated) with Prada SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prada SpA has no effect on the direction of Lanvin Group i.e., Lanvin Group and Prada SpA go up and down completely randomly.
Pair Corralation between Lanvin Group and Prada SpA
Given the investment horizon of 90 days Lanvin Group Holdings is expected to under-perform the Prada SpA. In addition to that, Lanvin Group is 1.81 times more volatile than Prada SpA. It trades about -0.03 of its total potential returns per unit of risk. Prada SpA is currently generating about 0.02 per unit of volatility. If you would invest 671.00 in Prada SpA on August 31, 2024 and sell it today you would earn a total of 21.00 from holding Prada SpA or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.99% |
| Values | Daily Returns |
Lanvin Group Holdings vs. Prada SpA
Performance |
| Timeline |
| Lanvin Group Holdings |
| Prada SpA |
Lanvin Group and Prada SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanvin Group and Prada SpA
The main advantage of trading using opposite Lanvin Group and Prada SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanvin Group position performs unexpectedly, Prada SpA 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 Prada SpA will offset losses from the drop in Prada SpA's long position.| Lanvin Group vs. Fossil Group | Lanvin Group vs. Signet Jewelers | Lanvin Group vs. Tapestry | Lanvin Group vs. Capri Holdings |
| Prada SpA vs. Lanvin Group Holdings | Prada SpA vs. MYT Netherlands Parent | Prada SpA vs. Movado Group | Prada SpA vs. Birks Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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