Correlation Between LVMH Moët and Lanvin Group
Can any of the company-specific risk be diversified away by investing in both LVMH Moët and Lanvin Group 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 LVMH Moët and Lanvin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LVMH Mot Hennessy and Lanvin Group Holdings, you can compare the effects of market volatilities on LVMH Moët and Lanvin Group 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 LVMH Moët with a short position of Lanvin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of LVMH Moët and Lanvin Group.
Diversification Opportunities for LVMH Moët and Lanvin Group
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LVMH and Lanvin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding LVMH Mot Hennessy and Lanvin Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanvin Group Holdings and LVMH Moët 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 LVMH Mot Hennessy are associated (or correlated) with Lanvin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanvin Group Holdings has no effect on the direction of LVMH Moët i.e., LVMH Moët and Lanvin Group go up and down completely randomly.
Pair Corralation between LVMH Moët and Lanvin Group
Assuming the 90 days horizon LVMH Mot Hennessy is expected to generate 0.29 times more return on investment than Lanvin Group. However, LVMH Mot Hennessy is 3.47 times less risky than Lanvin Group. It trades about -0.11 of its potential returns per unit of risk. Lanvin Group Holdings is currently generating about -0.05 per unit of risk. If you would invest 65,988 in LVMH Mot Hennessy on September 2, 2024 and sell it today you would lose (3,286) from holding LVMH Mot Hennessy or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LVMH Mot Hennessy vs. Lanvin Group Holdings
Performance |
| Timeline |
| LVMH Mot Hennessy |
| Lanvin Group Holdings |
LVMH Moët and Lanvin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LVMH Moët and Lanvin Group
The main advantage of trading using opposite LVMH Moët and Lanvin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LVMH Moët position performs unexpectedly, Lanvin Group 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 Lanvin Group will offset losses from the drop in Lanvin Group's long position.| LVMH Moët vs. Hermes International SA | LVMH Moët vs. Kering SA | LVMH Moët vs. Capri Holdings | LVMH Moët vs. Tapestry |
| Lanvin Group vs. Fossil Group | Lanvin Group vs. Signet Jewelers | Lanvin Group vs. Tapestry | Lanvin Group vs. Capri Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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