Correlation Between KERINGUNSPADR 1/10 and Compagnie Financière
Can any of the company-specific risk be diversified away by investing in both KERINGUNSPADR 1/10 and Compagnie Financière 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 KERINGUNSPADR 1/10 and Compagnie Financière into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KERINGUNSPADR 110 EO and Compagnie Financire Richemont, you can compare the effects of market volatilities on KERINGUNSPADR 1/10 and Compagnie Financière 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 KERINGUNSPADR 1/10 with a short position of Compagnie Financière. Check out your portfolio center. Please also check ongoing floating volatility patterns of KERINGUNSPADR 1/10 and Compagnie Financière.
Diversification Opportunities for KERINGUNSPADR 1/10 and Compagnie Financière
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KERINGUNSPADR and Compagnie is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KERINGUNSPADR 110 EO and Compagnie Financire Richemont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Financière and KERINGUNSPADR 1/10 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 KERINGUNSPADR 110 EO are associated (or correlated) with Compagnie Financière. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Financière has no effect on the direction of KERINGUNSPADR 1/10 i.e., KERINGUNSPADR 1/10 and Compagnie Financière go up and down completely randomly.
Pair Corralation between KERINGUNSPADR 1/10 and Compagnie Financière
Assuming the 90 days trading horizon KERINGUNSPADR 110 EO is expected to under-perform the Compagnie Financière. In addition to that, KERINGUNSPADR 1/10 is 1.06 times more volatile than Compagnie Financire Richemont. It trades about -0.01 of its total potential returns per unit of risk. Compagnie Financire Richemont is currently generating about 0.08 per unit of volatility. If you would invest 1,350 in Compagnie Financire Richemont on October 14, 2024 and sell it today you would earn a total of 140.00 from holding Compagnie Financire Richemont or generate 10.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KERINGUNSPADR 110 EO vs. Compagnie Financire Richemont
Performance |
| Timeline |
| KERINGUNSPADR 1/10 |
| Compagnie Financière |
KERINGUNSPADR 1/10 and Compagnie Financière Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KERINGUNSPADR 1/10 and Compagnie Financière
The main advantage of trading using opposite KERINGUNSPADR 1/10 and Compagnie Financière positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KERINGUNSPADR 1/10 position performs unexpectedly, Compagnie Financière 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 Compagnie Financière will offset losses from the drop in Compagnie Financière's long position.| KERINGUNSPADR 1/10 vs. LVMH Mot Hennessy | KERINGUNSPADR 1/10 vs. LVMH Mot Hennessy | KERINGUNSPADR 1/10 vs. Christian Dior SE | KERINGUNSPADR 1/10 vs. Compagnie Financire Richemont |
| Compagnie Financière vs. SINGAPORE AIRLINES | Compagnie Financière vs. Guidewire Software | Compagnie Financière vs. Magic Software Enterprises | Compagnie Financière vs. United Airlines 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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