Correlation Between Watches Of and Kering SA
Can any of the company-specific risk be diversified away by investing in both Watches Of and Kering SA 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 Watches Of and Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Watches of Switzerland and Kering SA, you can compare the effects of market volatilities on Watches Of and Kering SA 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 Watches Of with a short position of Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Watches Of and Kering SA.
Diversification Opportunities for Watches Of and Kering SA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Watches and Kering is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Watches of Switzerland and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA and Watches Of 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 Watches of Switzerland are associated (or correlated) with Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Watches Of i.e., Watches Of and Kering SA go up and down completely randomly.
Pair Corralation between Watches Of and Kering SA
Assuming the 90 days horizon Watches of Switzerland is expected to generate 1.67 times more return on investment than Kering SA. However, Watches Of is 1.67 times more volatile than Kering SA. It trades about -0.03 of its potential returns per unit of risk. Kering SA is currently generating about -0.09 per unit of risk. If you would invest 890.00 in Watches of Switzerland on September 4, 2024 and sell it today you would lose (343.00) from holding Watches of Switzerland or give up 38.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Watches of Switzerland vs. Kering SA
Performance |
| Timeline |
| Watches of Switzerland |
| Kering SA |
Watches Of and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Watches Of and Kering SA
The main advantage of trading using opposite Watches Of and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Watches Of position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Watches Of vs. Kering SA | Watches Of vs. Burberry Group Plc | Watches Of vs. Prada Spa PK | Watches Of vs. Compagnie Financire Richemont |
| Kering SA vs. Burberry Group Plc | Kering SA vs. Prada Spa PK | Kering SA vs. Compagnie Financire Richemont | Kering SA vs. Compagnie Financiere Richemont |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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