Correlation Between LVMH Moet and Christian Dior
Can any of the company-specific risk be diversified away by investing in both LVMH Moet and Christian Dior 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 Moet and Christian Dior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LVMH Moet Hennessy and Christian Dior SE, you can compare the effects of market volatilities on LVMH Moet and Christian Dior 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 Moet with a short position of Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of LVMH Moet and Christian Dior.
Diversification Opportunities for LVMH Moet and Christian Dior
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LVMH and Christian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding LVMH Moet Hennessy and Christian Dior SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christian Dior SE and LVMH Moet 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 Moet Hennessy are associated (or correlated) with Christian Dior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christian Dior SE has no effect on the direction of LVMH Moet i.e., LVMH Moet and Christian Dior go up and down completely randomly.
Pair Corralation between LVMH Moet and Christian Dior
If you would invest 62,993 in Christian Dior SE on November 3, 2024 and sell it today you would earn a total of 5,325 from holding Christian Dior SE or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
LVMH Moet Hennessy vs. Christian Dior SE
Performance |
| Timeline |
| LVMH Moet Hennessy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Christian Dior SE |
LVMH Moet and Christian Dior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LVMH Moet and Christian Dior
The main advantage of trading using opposite LVMH Moet and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LVMH Moet position performs unexpectedly, Christian Dior 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 Christian Dior will offset losses from the drop in Christian Dior's long position.| LVMH Moet vs. Hermes International SA | LVMH Moet vs. Hermes International SCA | LVMH Moet vs. Kering SA | LVMH Moet vs. Capri Holdings |
| Christian Dior vs. Hermes International SA | Christian Dior vs. Kering SA | Christian Dior vs. Kering SA | Christian Dior vs. Prada SpA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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