Correlation Between Stellantis and LVMH Mot
Can any of the company-specific risk be diversified away by investing in both Stellantis and LVMH Mot 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 Stellantis and LVMH Mot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellantis NV and LVMH Mot Hennessy, you can compare the effects of market volatilities on Stellantis and LVMH Mot 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 Stellantis with a short position of LVMH Mot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellantis and LVMH Mot.
Diversification Opportunities for Stellantis and LVMH Mot
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stellantis and LVMH is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stellantis NV and LVMH Mot Hennessy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LVMH Mot Hennessy and Stellantis 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 Stellantis NV are associated (or correlated) with LVMH Mot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LVMH Mot Hennessy has no effect on the direction of Stellantis i.e., Stellantis and LVMH Mot go up and down completely randomly.
Pair Corralation between Stellantis and LVMH Mot
Assuming the 90 days trading horizon Stellantis NV is expected to generate 0.99 times more return on investment than LVMH Mot. However, Stellantis NV is 1.01 times less risky than LVMH Mot. It trades about 0.11 of its potential returns per unit of risk. LVMH Mot Hennessy is currently generating about -0.27 per unit of risk. If you would invest 1,297 in Stellantis NV on November 28, 2024 and sell it today you would earn a total of 51.00 from holding Stellantis NV or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Stellantis NV vs. LVMH Mot Hennessy
Performance |
| Timeline |
| Stellantis NV |
| LVMH Mot Hennessy |
Stellantis and LVMH Mot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellantis and LVMH Mot
The main advantage of trading using opposite Stellantis and LVMH Mot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellantis position performs unexpectedly, LVMH Mot 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 LVMH Mot will offset losses from the drop in LVMH Mot's long position.| Stellantis vs. Blockchain Group SA | Stellantis vs. Artmarket SA | Stellantis vs. OVH Groupe SAS | Stellantis vs. Bd Multimedia |
| LVMH Mot vs. Kering SA | LVMH Mot vs. Hermes International SCA | LVMH Mot vs. LOreal SA | LVMH Mot 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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