Correlation Between LVMH Moet and Willamette Valley
Can any of the company-specific risk be diversified away by investing in both LVMH Moet and Willamette Valley 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 Willamette Valley 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 Willamette Valley Vineyards, you can compare the effects of market volatilities on LVMH Moet and Willamette Valley 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 Willamette Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of LVMH Moet and Willamette Valley.
Diversification Opportunities for LVMH Moet and Willamette Valley
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LVMH and Willamette is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding LVMH Moet Hennessy and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of LVMH Moet i.e., LVMH Moet and Willamette Valley go up and down completely randomly.
Pair Corralation between LVMH Moet and Willamette Valley
If you would invest 17,195 in LVMH Moet Hennessy on August 24, 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 | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
LVMH Moet Hennessy vs. Willamette Valley Vineyards
Performance |
| Timeline |
| LVMH Moet Hennessy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Willamette Valley |
LVMH Moet and Willamette Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LVMH Moet and Willamette Valley
The main advantage of trading using opposite LVMH Moet and Willamette Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LVMH Moet position performs unexpectedly, Willamette Valley 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 Willamette Valley will offset losses from the drop in Willamette Valley'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 |
| Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Pernod Ricard SA | Willamette Valley vs. Brown Forman | Willamette Valley vs. Treasury Wine Estates |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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