Correlation Between MYT Netherlands and Lanvin Group
Can any of the company-specific risk be diversified away by investing in both MYT Netherlands 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 MYT Netherlands and Lanvin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYT Netherlands Parent and Lanvin Group Holdings, you can compare the effects of market volatilities on MYT Netherlands 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 MYT Netherlands with a short position of Lanvin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYT Netherlands and Lanvin Group.
Diversification Opportunities for MYT Netherlands and Lanvin Group
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MYT and Lanvin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent 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 MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and Lanvin Group go up and down completely randomly.
Pair Corralation between MYT Netherlands and Lanvin Group
Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 1.5 times more return on investment than Lanvin Group. However, MYT Netherlands is 1.5 times more volatile than Lanvin Group Holdings. It trades about 0.17 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 392.00 in MYT Netherlands Parent on August 26, 2024 and sell it today you would earn a total of 308.00 from holding MYT Netherlands Parent or generate 78.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYT Netherlands Parent vs. Lanvin Group Holdings
Performance |
| Timeline |
| MYT Netherlands Parent |
| Lanvin Group Holdings |
MYT Netherlands and Lanvin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYT Netherlands and Lanvin Group
The main advantage of trading using opposite MYT Netherlands and Lanvin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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.| MYT Netherlands vs. VF Corporation | MYT Netherlands vs. Levi Strauss Co | MYT Netherlands vs. Under Armour A | MYT Netherlands vs. Oxford Industries |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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