Correlation Between Christian Dior and Altareit

Can any of the company-specific risk be diversified away by investing in both Christian Dior and Altareit 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 Christian Dior and Altareit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Christian Dior SE and Altareit, you can compare the effects of market volatilities on Christian Dior and Altareit 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 Christian Dior with a short position of Altareit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Christian Dior and Altareit.

Diversification Opportunities for Christian Dior and Altareit

-0.44

Correlation Coefficient

Christian Dior  Altareit

Very good diversification

The 3 months correlation between Christian and Altareit is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Christian Dior SE and Altareit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altareit and Christian Dior 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 Christian Dior SE are associated (or correlated) with Altareit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altareit has no effect on the direction of Christian Dior i.e., Christian Dior and Altareit go up and down completely randomly.

Pair Corralation between Christian Dior and Altareit

Assuming the 90 days trading horizon Christian Dior SE is expected to generate 8.81 times more return on investment than Altareit. However, Christian Dior is 8.81 times more volatile than Altareit. It trades about 0.03 of its potential returns per unit of risk. Altareit is currently generating about 0.11 per unit of risk. If you would invest  57,719  in Christian Dior SE on September 25, 2024 and sell it today you would earn a total of  1,781  from holding Christian Dior SE or generate 3.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Christian Dior SE  vs.  Altareit

Christian Dior SE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Christian Dior SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Christian Dior is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Altareit

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altareit are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Altareit is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Christian Dior and Altareit

The main advantage of trading using opposite Christian Dior and Altareit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Christian Dior position performs unexpectedly, Altareit 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 Altareit will offset losses from the drop in Altareit's long position.

The idea behind Christian Dior SE and Altareit pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.