Correlation Between Movado and Lanvin Group
Can any of the company-specific risk be diversified away by investing in both Movado 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 Movado and Lanvin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Movado Group and Lanvin Group Holdings, you can compare the effects of market volatilities on Movado 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 Movado with a short position of Lanvin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movado and Lanvin Group.
Diversification Opportunities for Movado and Lanvin Group
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Movado and Lanvin is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Movado Group 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 Movado 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 Movado Group 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 Movado i.e., Movado and Lanvin Group go up and down completely randomly.
Pair Corralation between Movado and Lanvin Group
Considering the 90-day investment horizon Movado Group is expected to generate 0.28 times more return on investment than Lanvin Group. However, Movado Group is 3.57 times less risky than Lanvin Group. It trades about 0.08 of its potential returns per unit of risk. Lanvin Group Holdings is currently generating about -0.01 per unit of risk. If you would invest 1,848 in Movado Group on August 26, 2024 and sell it today you would earn a total of 112.00 from holding Movado Group or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Movado Group vs. Lanvin Group Holdings
Performance |
| Timeline |
| Movado Group |
| Lanvin Group Holdings |
Movado and Lanvin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movado and Lanvin Group
The main advantage of trading using opposite Movado and Lanvin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movado 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.The idea behind Movado Group and Lanvin Group Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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