Correlation Between Laurent Perrier and Remy Cointreau

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

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

Diversification Opportunities for Laurent Perrier and Remy Cointreau

0.49

Correlation Coefficient

Laurent Perrier  Remy Cointreau

Very weak diversification

The 3 months correlation between Laurent and Remy is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Laurent Perrier and Remy Cointreau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remy Cointreau and Laurent Perrier 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 Laurent Perrier are associated (or correlated) with Remy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remy Cointreau has no effect on the direction of Laurent Perrier i.e., Laurent Perrier and Remy Cointreau go up and down completely randomly.

Pair Corralation between Laurent Perrier and Remy Cointreau

Assuming the 90 days trading horizon Laurent Perrier is expected to generate 0.69 times more return on investment than Remy Cointreau. However, Laurent Perrier is 1.45 times less risky than Remy Cointreau. It trades about -0.05 of its potential returns per unit of risk. Remy Cointreau is currently generating about -0.27 per unit of risk. If you would invest  10,250  in Laurent Perrier on October 9, 2024 and sell it today you would lose (150.00) from holding Laurent Perrier or give up 1.46% of portfolio value over 90 days.

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

Laurent Perrier  vs.  Remy Cointreau

Laurent Perrier

Risk-Adjusted Performance

2 of 100

Weak

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

Remy Cointreau

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Remy Cointreau has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Laurent Perrier and Remy Cointreau

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

The idea behind Laurent Perrier and Remy Cointreau 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.