Correlation Between Ferrari NV and Reitmans (Canada)
Can any of the company-specific risk be diversified away by investing in both Ferrari NV and Reitmans (Canada) 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 Ferrari NV and Reitmans (Canada) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrari NV and Reitmans Limited, you can compare the effects of market volatilities on Ferrari NV and Reitmans (Canada) 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 Ferrari NV with a short position of Reitmans (Canada). Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrari NV and Reitmans (Canada).
Diversification Opportunities for Ferrari NV and Reitmans (Canada)
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ferrari and Reitmans is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ferrari NV and Reitmans Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans (Canada) and Ferrari NV 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 Ferrari NV are associated (or correlated) with Reitmans (Canada). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitmans (Canada) has no effect on the direction of Ferrari NV i.e., Ferrari NV and Reitmans (Canada) go up and down completely randomly.
Pair Corralation between Ferrari NV and Reitmans (Canada)
Given the investment horizon of 90 days Ferrari NV is expected to under-perform the Reitmans (Canada). In addition to that, Ferrari NV is 4.62 times more volatile than Reitmans Limited. It trades about -0.21 of its total potential returns per unit of risk. Reitmans Limited is currently generating about -0.11 per unit of volatility. If you would invest 193.00 in Reitmans Limited on September 2, 2024 and sell it today you would lose (2.00) from holding Reitmans Limited or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrari NV vs. Reitmans Limited
Performance |
| Timeline |
| Ferrari NV |
| Reitmans (Canada) |
Ferrari NV and Reitmans (Canada) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrari NV and Reitmans (Canada)
The main advantage of trading using opposite Ferrari NV and Reitmans (Canada) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrari NV position performs unexpectedly, Reitmans (Canada) 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 Reitmans (Canada) will offset losses from the drop in Reitmans (Canada)'s long position.| Ferrari NV vs. Volkswagen AG Pref | Ferrari NV vs. Volkswagen AG 110 | Ferrari NV vs. Porsche Automobil Holding | Ferrari NV vs. Bayerische Motoren Werke |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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