Correlation Between Pernod Ricard and Remy Cointreau
Can any of the company-specific risk be diversified away by investing in both Pernod Ricard and Remy 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 Remy 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 Remy Cointreau, you can compare the effects of market volatilities on Pernod Ricard and Remy 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 Remy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pernod Ricard and Remy Cointreau.
Diversification Opportunities for Pernod Ricard and Remy Cointreau
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pernod and Remy is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pernod Ricard SA and Remy Cointreau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remy Cointreau 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 Remy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remy Cointreau has no effect on the direction of Pernod Ricard i.e., Pernod Ricard and Remy Cointreau go up and down completely randomly.
Pair Corralation between Pernod Ricard and Remy Cointreau
Assuming the 90 days horizon Pernod Ricard SA is expected to generate 0.64 times more return on investment than Remy Cointreau. However, Pernod Ricard SA is 1.57 times less risky than Remy Cointreau. It trades about -0.07 of its potential returns per unit of risk. Remy Cointreau is currently generating about -0.08 per unit of risk. If you would invest 17,948 in Pernod Ricard SA on August 26, 2024 and sell it today you would lose (7,283) from holding Pernod Ricard SA or give up 40.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pernod Ricard SA vs. Remy Cointreau
Performance |
| Timeline |
| Pernod Ricard SA |
| Remy Cointreau |
Pernod Ricard and Remy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pernod Ricard and Remy Cointreau
The main advantage of trading using opposite Pernod Ricard and Remy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pernod Ricard position performs unexpectedly, Remy 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 Remy Cointreau will offset losses from the drop in Remy Cointreau's long position.| Pernod Ricard vs. Robertet SA | Pernod Ricard vs. Virbac SA | Pernod Ricard vs. Thermador Groupe SA | Pernod Ricard vs. Elis SA |
| Remy Cointreau vs. Pernod Ricard SA | Remy Cointreau vs. SEB SA | Remy Cointreau vs. Sodexo SA | Remy Cointreau vs. Wendel |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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