Correlation Between Remy Cointreau and Vintage Wine
Can any of the company-specific risk be diversified away by investing in both Remy Cointreau and Vintage Wine 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 Remy Cointreau and Vintage Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Remy Cointreau SA and Vintage Wine Estates, you can compare the effects of market volatilities on Remy Cointreau and Vintage Wine 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 Remy Cointreau with a short position of Vintage Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Remy Cointreau and Vintage Wine.
Diversification Opportunities for Remy Cointreau and Vintage Wine
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Remy and Vintage is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Remy Cointreau SA and Vintage Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vintage Wine Estates and Remy Cointreau 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 Remy Cointreau SA are associated (or correlated) with Vintage Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vintage Wine Estates has no effect on the direction of Remy Cointreau i.e., Remy Cointreau and Vintage Wine go up and down completely randomly.
Pair Corralation between Remy Cointreau and Vintage Wine
Assuming the 90 days horizon Remy Cointreau SA is expected to generate 0.2 times more return on investment than Vintage Wine. However, Remy Cointreau SA is 4.99 times less risky than Vintage Wine. It trades about -0.08 of its potential returns per unit of risk. Vintage Wine Estates is currently generating about -0.08 per unit of risk. If you would invest 1,620 in Remy Cointreau SA on August 27, 2024 and sell it today you would lose (1,043) from holding Remy Cointreau SA or give up 64.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.74% |
| Values | Daily Returns |
Remy Cointreau SA vs. Vintage Wine Estates
Performance |
| Timeline |
| Remy Cointreau SA |
| Vintage Wine Estates |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Remy Cointreau and Vintage Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Remy Cointreau and Vintage Wine
The main advantage of trading using opposite Remy Cointreau and Vintage Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remy Cointreau position performs unexpectedly, Vintage Wine 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 Vintage Wine will offset losses from the drop in Vintage Wine's long position.| Remy Cointreau vs. Diageo PLC ADR | Remy Cointreau vs. Constellation Brands Class | Remy Cointreau vs. Morningstar Unconstrained Allocation | Remy Cointreau vs. SEI Investments |
| Vintage Wine vs. MGP Ingredients | Vintage Wine vs. Brown Forman | Vintage Wine vs. Diageo PLC ADR | Vintage Wine vs. Brown Forman |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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