Correlation Between Safran SA and Pernod Ricard
Can any of the company-specific risk be diversified away by investing in both Safran SA and Pernod Ricard 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 Safran SA and Pernod Ricard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safran SA and Pernod Ricard SA, you can compare the effects of market volatilities on Safran SA and Pernod Ricard 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 Safran SA with a short position of Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safran SA and Pernod Ricard.
Diversification Opportunities for Safran SA and Pernod Ricard
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Safran and Pernod is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Safran SA and Pernod Ricard SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pernod Ricard SA and Safran SA 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 Safran SA are associated (or correlated) with Pernod Ricard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pernod Ricard SA has no effect on the direction of Safran SA i.e., Safran SA and Pernod Ricard go up and down completely randomly.
Pair Corralation between Safran SA and Pernod Ricard
Assuming the 90 days trading horizon Safran SA is expected to generate 0.89 times more return on investment than Pernod Ricard. However, Safran SA is 1.13 times less risky than Pernod Ricard. It trades about 0.11 of its potential returns per unit of risk. Pernod Ricard SA is currently generating about -0.07 per unit of risk. If you would invest 11,431 in Safran SA on August 24, 2024 and sell it today you would earn a total of 10,579 from holding Safran SA or generate 92.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safran SA vs. Pernod Ricard SA
Performance |
| Timeline |
| Safran SA |
| Pernod Ricard SA |
Safran SA and Pernod Ricard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safran SA and Pernod Ricard
The main advantage of trading using opposite Safran SA and Pernod Ricard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safran SA position performs unexpectedly, Pernod Ricard 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 Pernod Ricard will offset losses from the drop in Pernod Ricard's long position.| Safran SA vs. Thales SA | Safran SA vs. Vinci SA | Safran SA vs. Air Liquide SA | Safran SA vs. Dassault Systemes SE |
| Pernod Ricard vs. LOreal SA | Pernod Ricard vs. Danone SA | Pernod Ricard vs. Compagnie Generale des | Pernod Ricard vs. Air Liquide 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |