Correlation Between Hermes International and Stellantis
Can any of the company-specific risk be diversified away by investing in both Hermes International and Stellantis 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 Hermes International and Stellantis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes International SCA and Stellantis NV, you can compare the effects of market volatilities on Hermes International and Stellantis 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 Hermes International with a short position of Stellantis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes International and Stellantis.
Diversification Opportunities for Hermes International and Stellantis
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hermes and Stellantis is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hermes International SCA and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV and Hermes International 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 Hermes International SCA are associated (or correlated) with Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of Hermes International i.e., Hermes International and Stellantis go up and down completely randomly.
Pair Corralation between Hermes International and Stellantis
Assuming the 90 days trading horizon Hermes International SCA is expected to under-perform the Stellantis. But the stock apears to be less risky and, when comparing its historical volatility, Hermes International SCA is 1.36 times less risky than Stellantis. The stock trades about -0.12 of its potential returns per unit of risk. The Stellantis NV is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,240 in Stellantis NV on August 30, 2024 and sell it today you would lose (27.00) from holding Stellantis NV or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Hermes International SCA vs. Stellantis NV
Performance |
| Timeline |
| Hermes International SCA |
| Stellantis NV |
Hermes International and Stellantis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hermes International and Stellantis
The main advantage of trading using opposite Hermes International and Stellantis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes International position performs unexpectedly, Stellantis 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 Stellantis will offset losses from the drop in Stellantis' long position.| Hermes International vs. Kering SA | Hermes International vs. LVMH Mot Hennessy | Hermes International vs. LOreal SA | Hermes International vs. Christian Dior SE |
| Stellantis vs. LVMH Mot Hennessy | Stellantis vs. LOreal SA | Stellantis vs. Hermes International SCA | Stellantis vs. Manitou BF SA |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |