Correlation Between Transgene and Christian Dior
Can any of the company-specific risk be diversified away by investing in both Transgene and Christian Dior 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 Transgene and Christian Dior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transgene SA and Christian Dior SE, you can compare the effects of market volatilities on Transgene and Christian Dior 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 Transgene with a short position of Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transgene and Christian Dior.
Diversification Opportunities for Transgene and Christian Dior
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transgene and Christian is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Transgene SA and Christian Dior SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christian Dior SE and Transgene 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 Transgene SA are associated (or correlated) with Christian Dior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christian Dior SE has no effect on the direction of Transgene i.e., Transgene and Christian Dior go up and down completely randomly.
Pair Corralation between Transgene and Christian Dior
Assuming the 90 days trading horizon Transgene SA is expected to under-perform the Christian Dior. In addition to that, Transgene is 1.92 times more volatile than Christian Dior SE. It trades about -0.23 of its total potential returns per unit of risk. Christian Dior SE is currently generating about -0.22 per unit of volatility. If you would invest 66,250 in Christian Dior SE on August 28, 2024 and sell it today you would lose (10,800) from holding Christian Dior SE or give up 16.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transgene SA vs. Christian Dior SE
Performance |
| Timeline |
| Transgene SA |
| Christian Dior SE |
Transgene and Christian Dior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transgene and Christian Dior
The main advantage of trading using opposite Transgene and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transgene position performs unexpectedly, Christian Dior 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 Christian Dior will offset losses from the drop in Christian Dior's long position.| Transgene vs. Innate Pharma | Transgene vs. Nanobiotix SA | Transgene vs. Genfit | Transgene vs. AB Science SA |
| Christian Dior vs. FIPP SA | Christian Dior vs. Adomos SA | Christian Dior vs. Acanthe Dveloppement | Christian Dior vs. Acheter Louer |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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