Correlation Between Legrand SA and Pernod Ricard
Can any of the company-specific risk be diversified away by investing in both Legrand 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 Legrand 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 Legrand SA and Pernod Ricard SA, you can compare the effects of market volatilities on Legrand 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 Legrand SA with a short position of Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legrand SA and Pernod Ricard.
Diversification Opportunities for Legrand SA and Pernod Ricard
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legrand and Pernod is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Legrand 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 Legrand 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 Legrand 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 Legrand SA i.e., Legrand SA and Pernod Ricard go up and down completely randomly.
Pair Corralation between Legrand SA and Pernod Ricard
Assuming the 90 days horizon Legrand SA is expected to generate 1.23 times more return on investment than Pernod Ricard. However, Legrand SA is 1.23 times more volatile than Pernod Ricard SA. It trades about -0.19 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 10,580 in Legrand SA on August 27, 2024 and sell it today you would lose (902.00) from holding Legrand SA or give up 8.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legrand SA vs. Pernod Ricard SA
Performance |
| Timeline |
| Legrand SA |
| Pernod Ricard SA |
Legrand SA and Pernod Ricard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legrand SA and Pernod Ricard
The main advantage of trading using opposite Legrand SA and Pernod Ricard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legrand 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.| Legrand SA vs. Schneider Electric SE | Legrand SA vs. Publicis Groupe SA | Legrand SA vs. Pernod Ricard SA | Legrand SA vs. Compagnie Generale des |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |