Correlation Between Pernod Ricard and Crimson Wine
Can any of the company-specific risk be diversified away by investing in both Pernod Ricard and Crimson Wine 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 Crimson Wine 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 Crimson Wine, you can compare the effects of market volatilities on Pernod Ricard and Crimson Wine 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 Crimson Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pernod Ricard and Crimson Wine.
Diversification Opportunities for Pernod Ricard and Crimson Wine
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pernod and Crimson is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pernod Ricard SA and Crimson Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crimson Wine 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 Crimson Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crimson Wine has no effect on the direction of Pernod Ricard i.e., Pernod Ricard and Crimson Wine go up and down completely randomly.
Pair Corralation between Pernod Ricard and Crimson Wine
Assuming the 90 days horizon Pernod Ricard SA is expected to under-perform the Crimson Wine. In addition to that, Pernod Ricard is 2.0 times more volatile than Crimson Wine. It trades about -0.29 of its total potential returns per unit of risk. Crimson Wine is currently generating about -0.11 per unit of volatility. If you would invest 682.00 in Crimson Wine on August 28, 2024 and sell it today you would lose (27.00) from holding Crimson Wine or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pernod Ricard SA vs. Crimson Wine
Performance |
| Timeline |
| Pernod Ricard SA |
| Crimson Wine |
Pernod Ricard and Crimson Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pernod Ricard and Crimson Wine
The main advantage of trading using opposite Pernod Ricard and Crimson Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pernod Ricard position performs unexpectedly, Crimson Wine 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 Crimson Wine will offset losses from the drop in Crimson Wine'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 |
| Crimson Wine vs. Embotelladora Andina SA | Crimson Wine vs. Signet International Holdings | Crimson Wine vs. National Beverage Corp | Crimson Wine 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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