Correlation Between Pandora AS and LVMH Moët
Can any of the company-specific risk be diversified away by investing in both Pandora AS and LVMH Moët 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 Pandora AS and LVMH Moët into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pandora AS and LVMH Mot Hennessy, you can compare the effects of market volatilities on Pandora AS and LVMH Moët 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 Pandora AS with a short position of LVMH Moët. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pandora AS and LVMH Moët.
Diversification Opportunities for Pandora AS and LVMH Moët
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pandora and LVMH is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pandora AS 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 Pandora AS 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 Pandora AS are associated (or correlated) with LVMH Moët. 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 Pandora AS i.e., Pandora AS and LVMH Moët go up and down completely randomly.
Pair Corralation between Pandora AS and LVMH Moët
Assuming the 90 days horizon Pandora AS is expected to generate 1.0 times more return on investment than LVMH Moët. However, Pandora AS is 1.0 times less risky than LVMH Moët. It trades about -0.04 of its potential returns per unit of risk. LVMH Mot Hennessy is currently generating about -0.14 per unit of risk. If you would invest 14,950 in Pandora AS on January 24, 2024 and sell it today you would lose (165.00) from holding Pandora AS or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pandora AS vs. LVMH Mot Hennessy
Performance |
| Timeline |
| Pandora AS |
| LVMH Mot Hennessy |
Pandora AS and LVMH Moët Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pandora AS and LVMH Moët
The main advantage of trading using opposite Pandora AS and LVMH Moët positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pandora AS position performs unexpectedly, LVMH Moët 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 Moët will offset losses from the drop in LVMH Moët's long position.| Pandora AS vs. LG Electronics | Pandora AS vs. Lendlease Group | Pandora AS vs. Marie Brizard Wine | Pandora AS vs. WILLIS LEASE FIN |
| LVMH Moët vs. Burlington Stores | LVMH Moët vs. Elmos Semiconductor SE | LVMH Moët vs. JIAHUA STORES | LVMH Moët vs. TOREX SEMICONDUCTOR LTD |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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