Correlation Between Compagnie and Laurent Perrier
Can any of the company-specific risk be diversified away by investing in both Compagnie and Laurent Perrier 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 Compagnie and Laurent Perrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Chemins and Laurent Perrier, you can compare the effects of market volatilities on Compagnie and Laurent Perrier 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 Compagnie with a short position of Laurent Perrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Laurent Perrier.
Diversification Opportunities for Compagnie and Laurent Perrier
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and Laurent is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Chemins and Laurent Perrier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurent Perrier and Compagnie 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 Compagnie de Chemins are associated (or correlated) with Laurent Perrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurent Perrier has no effect on the direction of Compagnie i.e., Compagnie and Laurent Perrier go up and down completely randomly.
Pair Corralation between Compagnie and Laurent Perrier
Assuming the 90 days trading horizon Compagnie de Chemins is expected to generate 1.86 times more return on investment than Laurent Perrier. However, Compagnie is 1.86 times more volatile than Laurent Perrier. It trades about 0.03 of its potential returns per unit of risk. Laurent Perrier is currently generating about -0.09 per unit of risk. If you would invest 70,873 in Compagnie de Chemins on November 28, 2024 and sell it today you would earn a total of 4,127 from holding Compagnie de Chemins or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Compagnie de Chemins vs. Laurent Perrier
Performance |
| Timeline |
| Compagnie de Chemins |
| Laurent Perrier |
Compagnie and Laurent Perrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Laurent Perrier
The main advantage of trading using opposite Compagnie and Laurent Perrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Laurent Perrier 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 Laurent Perrier will offset losses from the drop in Laurent Perrier's long position.| Compagnie vs. Technip Energies BV | Compagnie vs. Acticor Biotech SAS | Compagnie vs. Mauna Kea Technologies | Compagnie vs. Odyssee Technologies SA |
| Laurent Perrier vs. Remy Cointreau | Laurent Perrier vs. Vranken Pommery Monopole Socit | Laurent Perrier vs. Interparfums SA | Laurent Perrier vs. Guerbet S A |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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