Correlation Between Lanvin Group and Ralph Lauren

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

By analyzing existing cross correlation between Lanvin Group Holdings and Ralph Lauren Corp, you can compare the effects of market volatilities on Lanvin Group and Ralph Lauren 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 Lanvin Group with a short position of Ralph Lauren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanvin Group and Ralph Lauren.

Diversification Opportunities for Lanvin Group and Ralph Lauren

-0.6

Correlation Coefficient

Lanvin Group  Ralph Lauren

Excellent diversification

The 3 months correlation between Lanvin and Ralph is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lanvin Group Holdings and Ralph Lauren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ralph Lauren Corp and Lanvin Group 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 Lanvin Group Holdings are associated (or correlated) with Ralph Lauren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ralph Lauren Corp has no effect on the direction of Lanvin Group i.e., Lanvin Group and Ralph Lauren go up and down completely randomly.

Pair Corralation between Lanvin Group and Ralph Lauren

Given the investment horizon of 90 days Lanvin Group Holdings is expected to under-perform the Ralph Lauren. In addition to that, Lanvin Group is 3.29 times more volatile than Ralph Lauren Corp. It trades about -0.01 of its total potential returns per unit of risk. Ralph Lauren Corp is currently generating about 0.27 per unit of volatility. If you would invest  17,315  in Ralph Lauren Corp on September 3, 2024 and sell it today you would earn a total of  5,825  from holding Ralph Lauren Corp or generate 33.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Lanvin Group Holdings  vs.  Ralph Lauren Corp

Lanvin Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lanvin Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Lanvin Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ralph Lauren Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ralph Lauren Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Ralph Lauren disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lanvin Group and Ralph Lauren

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

The idea behind Lanvin Group Holdings and Ralph Lauren Corp 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.