Correlation Between CHRISTIAN DIOR and CHRISTIAN DIOR

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

By analyzing existing cross correlation between CHRISTIAN DIOR and CHRISTIAN DIOR ADR14EO2, you can compare the effects of market volatilities on CHRISTIAN DIOR 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 CHRISTIAN DIOR with a short position of CHRISTIAN DIOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHRISTIAN DIOR and CHRISTIAN DIOR.

Diversification Opportunities for CHRISTIAN DIOR and CHRISTIAN DIOR

0.92

Correlation Coefficient

CHRISTIAN DIOR  CHRISTIAN DIOR

Almost no diversification

The 3 months correlation between CHRISTIAN and CHRISTIAN is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding CHRISTIAN DIOR and CHRISTIAN DIOR ADR14EO2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRISTIAN DIOR ADR14EO2 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 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 ADR14EO2 has no effect on the direction of CHRISTIAN DIOR i.e., CHRISTIAN DIOR and CHRISTIAN DIOR go up and down completely randomly.

Pair Corralation between CHRISTIAN DIOR and CHRISTIAN DIOR

Assuming the 90 days trading horizon CHRISTIAN DIOR is expected to generate 0.81 times more return on investment than CHRISTIAN DIOR. However, CHRISTIAN DIOR is 1.24 times less risky than CHRISTIAN DIOR. It trades about -0.06 of its potential returns per unit of risk. CHRISTIAN DIOR ADR14EO2 is currently generating about -0.05 per unit of risk. If you would invest  60,300  in CHRISTIAN DIOR on December 26, 2024 and sell it today you would lose (4,150) from holding CHRISTIAN DIOR or give up 6.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

CHRISTIAN DIOR  vs.  CHRISTIAN DIOR ADR14EO2

CHRISTIAN DIOR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHRISTIAN DIOR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CHRISTIAN DIOR ADR14EO2

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHRISTIAN DIOR ADR14EO2 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CHRISTIAN DIOR and CHRISTIAN DIOR

The main advantage of trading using opposite CHRISTIAN DIOR and CHRISTIAN DIOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHRISTIAN DIOR 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.

The idea behind CHRISTIAN DIOR and CHRISTIAN DIOR ADR14EO2 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.