Correlation Between Pernod Ricard and Aristocrat Group
Can any of the company-specific risk be diversified away by investing in both Pernod Ricard and Aristocrat 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 Pernod Ricard and Aristocrat Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pernod Ricard SA and Aristocrat Group Corp, you can compare the effects of market volatilities on Pernod Ricard and Aristocrat 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 Pernod Ricard with a short position of Aristocrat Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pernod Ricard and Aristocrat Group.
Diversification Opportunities for Pernod Ricard and Aristocrat Group
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pernod and Aristocrat is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pernod Ricard SA and Aristocrat Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Group Corp and Pernod Ricard 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 Pernod Ricard SA are associated (or correlated) with Aristocrat Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Group Corp has no effect on the direction of Pernod Ricard i.e., Pernod Ricard and Aristocrat Group go up and down completely randomly.
Pair Corralation between Pernod Ricard and Aristocrat Group
Assuming the 90 days horizon Pernod Ricard SA is expected to generate 0.49 times more return on investment than Aristocrat Group. However, Pernod Ricard SA is 2.03 times less risky than Aristocrat Group. It trades about -0.13 of its potential returns per unit of risk. Aristocrat Group Corp is currently generating about -0.15 per unit of risk. If you would invest 14,250 in Pernod Ricard SA on August 28, 2024 and sell it today you would lose (3,395) from holding Pernod Ricard SA or give up 23.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pernod Ricard SA vs. Aristocrat Group Corp
Performance |
| Timeline |
| Pernod Ricard SA |
| Aristocrat Group Corp |
Pernod Ricard and Aristocrat Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pernod Ricard and Aristocrat Group
The main advantage of trading using opposite Pernod Ricard and Aristocrat Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pernod Ricard position performs unexpectedly, Aristocrat 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 Aristocrat Group will offset losses from the drop in Aristocrat Group's long position.| Pernod Ricard vs. Remy Cointreau SA | Pernod Ricard vs. Treasury Wine Estates | Pernod Ricard vs. MGP Ingredients | Pernod Ricard vs. Naked Wines plc |
| Aristocrat Group vs. Embotelladora Andina SA | Aristocrat Group vs. Signet International Holdings | Aristocrat Group vs. National Beverage Corp | Aristocrat Group vs. PT Astra International |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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