Correlation Between Pernod Ricard and Rmy Cointreau
Can any of the company-specific risk be diversified away by investing in both Pernod Ricard and Rmy Cointreau 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 Rmy Cointreau 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 Rmy Cointreau SA, you can compare the effects of market volatilities on Pernod Ricard and Rmy Cointreau 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 Rmy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pernod Ricard and Rmy Cointreau.
Diversification Opportunities for Pernod Ricard and Rmy Cointreau
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pernod and Rmy is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pernod Ricard SA and Rmy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmy Cointreau SA 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 Rmy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmy Cointreau SA has no effect on the direction of Pernod Ricard i.e., Pernod Ricard and Rmy Cointreau go up and down completely randomly.
Pair Corralation between Pernod Ricard and Rmy Cointreau
Assuming the 90 days horizon Pernod Ricard SA is expected to generate 0.46 times more return on investment than Rmy Cointreau. However, Pernod Ricard SA is 2.19 times less risky than Rmy Cointreau. It trades about -0.05 of its potential returns per unit of risk. Rmy Cointreau SA is currently generating about -0.05 per unit of risk. If you would invest 3,663 in Pernod Ricard SA on September 13, 2024 and sell it today you would lose (1,313) from holding Pernod Ricard SA or give up 35.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 80.16% |
| Values | Daily Returns |
Pernod Ricard SA vs. Rmy Cointreau SA
Performance |
| Timeline |
| Pernod Ricard SA |
| Rmy Cointreau SA |
Pernod Ricard and Rmy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pernod Ricard and Rmy Cointreau
The main advantage of trading using opposite Pernod Ricard and Rmy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pernod Ricard position performs unexpectedly, Rmy Cointreau 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 Rmy Cointreau will offset losses from the drop in Rmy Cointreau's long position.| Pernod Ricard vs. Andrew Peller Limited | Pernod Ricard vs. Aristocrat Group Corp | Pernod Ricard vs. Iconic Brands | Pernod Ricard vs. Naked Wines plc |
| Rmy Cointreau vs. Remy Cointreau SA | Rmy Cointreau vs. Pernod Ricard SA | Rmy Cointreau vs. Carlsberg AS | Rmy Cointreau vs. Heineken Holding NV |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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