Correlation Between Kering SA and Christian Dior
Can any of the company-specific risk be diversified away by investing in both Kering SA and Christian Dior 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 Kering SA and Christian Dior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and Christian Dior SE, you can compare the effects of market volatilities on Kering SA and Christian Dior 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 Kering SA with a short position of Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and Christian Dior.
Diversification Opportunities for Kering SA and Christian Dior
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kering and Christian is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and Christian Dior SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christian Dior SE and Kering SA 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 Kering SA are associated (or correlated) with Christian Dior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christian Dior SE has no effect on the direction of Kering SA i.e., Kering SA and Christian Dior go up and down completely randomly.
Pair Corralation between Kering SA and Christian Dior
Assuming the 90 days horizon Kering SA is expected to under-perform the Christian Dior. In addition to that, Kering SA is 1.02 times more volatile than Christian Dior SE. It trades about -0.22 of its total potential returns per unit of risk. Christian Dior SE is currently generating about -0.21 per unit of volatility. If you would invest 16,666 in Christian Dior SE on August 28, 2024 and sell it today you would lose (2,266) from holding Christian Dior SE or give up 13.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kering SA vs. Christian Dior SE
Performance |
| Timeline |
| Kering SA |
| Christian Dior SE |
Kering SA and Christian Dior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kering SA and Christian Dior
The main advantage of trading using opposite Kering SA and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA position performs unexpectedly, Christian Dior 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 Christian Dior will offset losses from the drop in Christian Dior's long position.| Kering SA vs. Prada SpA | Kering SA vs. Kering SA | Kering SA vs. Christian Dior SE | Kering SA vs. Compagnie Financiere Richemont |
| Christian Dior vs. Kering SA | Christian Dior vs. Compagnie Financire Richemont | Christian Dior vs. Prada SpA | Christian Dior vs. Compagnie Financiere Richemont |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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