Correlation Between LVMH Moet and Hermes International
Can any of the company-specific risk be diversified away by investing in both LVMH Moet and Hermes International 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 Hermes International 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 Hermes International SA, you can compare the effects of market volatilities on LVMH Moet and Hermes International 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 Hermes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of LVMH Moet and Hermes International.
Diversification Opportunities for LVMH Moet and Hermes International
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between LVMH and Hermes is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding LVMH Moet Hennessy and Hermes International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hermes International 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 Hermes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hermes International has no effect on the direction of LVMH Moet i.e., LVMH Moet and Hermes International go up and down completely randomly.
Pair Corralation between LVMH Moet and Hermes International
If you would invest 17,195 in LVMH Moet Hennessy on August 28, 2024 and sell it today you would earn a total of 0.00 from holding LVMH Moet Hennessy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
LVMH Moet Hennessy vs. Hermes International SA
Performance |
| Timeline |
| LVMH Moet Hennessy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hermes International |
LVMH Moet and Hermes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LVMH Moet and Hermes International
The main advantage of trading using opposite LVMH Moet and Hermes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LVMH Moet position performs unexpectedly, Hermes International 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 Hermes International will offset losses from the drop in Hermes International'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 |
| Hermes International vs. LVMH Mot Hennessy | Hermes International vs. Kering SA | Hermes International vs. Capri Holdings | Hermes International vs. Tapestry |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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