Correlation Between Qantas Airways and LVMH Moët
Can any of the company-specific risk be diversified away by investing in both Qantas Airways and LVMH Moët 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 Qantas Airways and LVMH Moët into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qantas Airways Limited and LVMH Mot Hennessy, you can compare the effects of market volatilities on Qantas Airways and LVMH Moët 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 Qantas Airways with a short position of LVMH Moët. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qantas Airways and LVMH Moët.
Diversification Opportunities for Qantas Airways and LVMH Moët
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Qantas and LVMH is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Qantas Airways Limited and LVMH Mot Hennessy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LVMH Mot Hennessy and Qantas Airways 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 Qantas Airways Limited are associated (or correlated) with LVMH Moët. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LVMH Mot Hennessy has no effect on the direction of Qantas Airways i.e., Qantas Airways and LVMH Moët go up and down completely randomly.
Pair Corralation between Qantas Airways and LVMH Moët
Assuming the 90 days horizon Qantas Airways Limited is expected to generate 1.64 times more return on investment than LVMH Moët. However, Qantas Airways is 1.64 times more volatile than LVMH Mot Hennessy. It trades about 0.13 of its potential returns per unit of risk. LVMH Mot Hennessy is currently generating about 0.12 per unit of risk. If you would invest 538.00 in Qantas Airways Limited on October 15, 2024 and sell it today you would earn a total of 23.00 from holding Qantas Airways Limited or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qantas Airways Limited vs. LVMH Mot Hennessy
Performance |
| Timeline |
| Qantas Airways |
| LVMH Mot Hennessy |
Qantas Airways and LVMH Moët Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qantas Airways and LVMH Moët
The main advantage of trading using opposite Qantas Airways and LVMH Moët positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qantas Airways position performs unexpectedly, LVMH Moët 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 Moët will offset losses from the drop in LVMH Moët's long position.| Qantas Airways vs. VARIOUS EATERIES LS | Qantas Airways vs. Soken Chemical Engineering | Qantas Airways vs. SEKISUI CHEMICAL | Qantas Airways vs. X FAB Silicon Foundries |
| LVMH Moët vs. LVMH Mot Hennessy | LVMH Moët vs. Christian Dior SE | LVMH Moët vs. Compagnie Financire 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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