Correlation Between Kering SA and LVMH Moet
Can any of the company-specific risk be diversified away by investing in both Kering SA and LVMH Moet 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 LVMH Moet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and LVMH Moet Hennessy, you can compare the effects of market volatilities on Kering SA and LVMH Moet 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 LVMH Moet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and LVMH Moet.
Diversification Opportunities for Kering SA and LVMH Moet
Very weak diversification
The 3 months correlation between Kering and LVMH is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and LVMH Moet Hennessy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LVMH Moet Hennessy 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 LVMH Moet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LVMH Moet Hennessy has no effect on the direction of Kering SA i.e., Kering SA and LVMH Moet go up and down completely randomly.
Pair Corralation between Kering SA and LVMH Moet
If you would invest 2,399 in Kering SA on November 3, 2024 and sell it today you would earn a total of 211.00 from holding Kering SA or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Kering SA vs. LVMH Moet Hennessy
Performance |
| Timeline |
| Kering SA |
| LVMH Moet Hennessy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kering SA and LVMH Moet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kering SA and LVMH Moet
The main advantage of trading using opposite Kering SA and LVMH Moet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA position performs unexpectedly, LVMH Moet 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 LVMH Moet will offset losses from the drop in LVMH Moet's long position.| Kering SA vs. Burberry Group Plc | Kering SA vs. Swatch Group AG | Kering SA vs. Prada Spa PK | Kering SA vs. Compagnie Financire Richemont |
| LVMH Moet vs. Hermes International SA | LVMH Moet vs. Hermes International SCA | LVMH Moet vs. Kering SA | LVMH Moet 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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