Correlation Between Retail Estates and Rémy Cointreau
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Rémy 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 Retail Estates and Rémy Cointreau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and Rmy Cointreau SA, you can compare the effects of market volatilities on Retail Estates and Rémy 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 Retail Estates with a short position of Rémy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Rémy Cointreau.
Diversification Opportunities for Retail Estates and Rémy Cointreau
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Retail and Rémy is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV 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 Retail Estates 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 Retail Estates NV are associated (or correlated) with Rémy 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 Retail Estates i.e., Retail Estates and Rémy Cointreau go up and down completely randomly.
Pair Corralation between Retail Estates and Rémy Cointreau
Assuming the 90 days horizon Retail Estates NV is expected to generate 0.49 times more return on investment than Rémy Cointreau. However, Retail Estates NV is 2.04 times less risky than Rémy Cointreau. It trades about -0.06 of its potential returns per unit of risk. Rmy Cointreau SA is currently generating about -0.09 per unit of risk. If you would invest 6,210 in Retail Estates NV on November 3, 2024 and sell it today you would lose (550.00) from holding Retail Estates NV or give up 8.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. Rmy Cointreau SA
Performance |
| Timeline |
| Retail Estates NV |
| Rmy Cointreau SA |
Retail Estates and Rémy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Rémy Cointreau
The main advantage of trading using opposite Retail Estates and Rémy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Rémy 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 Rémy Cointreau will offset losses from the drop in Rémy Cointreau's long position.| Retail Estates vs. PURE FOODS TASMANIA | Retail Estates vs. Ares Management Corp | Retail Estates vs. CEOTRONICS | Retail Estates vs. SHIP HEALTHCARE HLDGINC |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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