Correlation Between Manitou BF and Christian Dior
Can any of the company-specific risk be diversified away by investing in both Manitou BF 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 Manitou BF and Christian Dior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Christian Dior SE, you can compare the effects of market volatilities on Manitou BF 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 Manitou BF with a short position of Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Christian Dior.
Diversification Opportunities for Manitou BF and Christian Dior
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manitou and Christian is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF 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 Manitou BF 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 Manitou BF 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 Manitou BF i.e., Manitou BF and Christian Dior go up and down completely randomly.
Pair Corralation between Manitou BF and Christian Dior
Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the Christian Dior. But the stock apears to be less risky and, when comparing its historical volatility, Manitou BF SA is 1.05 times less risky than Christian Dior. The stock trades about -0.04 of its potential returns per unit of risk. The Christian Dior SE is currently generating about 0.03 of returns per unit of risk over similar time horizon. 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 Together |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Manitou BF SA vs. Christian Dior SE
Performance |
Timeline |
Manitou BF SA |
Christian Dior SE |
Manitou BF and Christian Dior Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Manitou BF and Christian Dior
The main advantage of trading using opposite Manitou BF and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF 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.Manitou BF vs. Pernod Ricard SA | Manitou BF vs. Compagnie Generale des | Manitou BF vs. Compagnie de Saint Gobain |
Christian Dior vs. FIPP SA | Christian Dior vs. Adomos SA | Christian Dior vs. Acheter Louer | Christian Dior vs. Manitou BF SA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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