Correlation Between MGP Ingredients and Remy Cointreau
Can any of the company-specific risk be diversified away by investing in both MGP Ingredients 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 MGP Ingredients and Remy Cointreau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGP Ingredients and Remy Cointreau SA, you can compare the effects of market volatilities on MGP Ingredients 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 MGP Ingredients with a short position of Remy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGP Ingredients and Remy Cointreau.
Diversification Opportunities for MGP Ingredients and Remy Cointreau
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MGP and Remy is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding MGP Ingredients and Remy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remy Cointreau SA and MGP Ingredients 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 MGP Ingredients 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 SA has no effect on the direction of MGP Ingredients i.e., MGP Ingredients and Remy Cointreau go up and down completely randomly.
Pair Corralation between MGP Ingredients and Remy Cointreau
Given the investment horizon of 90 days MGP Ingredients is expected to under-perform the Remy Cointreau. But the stock apears to be less risky and, when comparing its historical volatility, MGP Ingredients is 1.05 times less risky than Remy Cointreau. The stock trades about -0.03 of its potential returns per unit of risk. The Remy Cointreau SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 608.00 in Remy Cointreau SA on September 5, 2024 and sell it today you would earn a total of 11.00 from holding Remy Cointreau SA or generate 1.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
MGP Ingredients vs. Remy Cointreau SA
Performance |
Timeline |
MGP Ingredients |
Remy Cointreau SA |
MGP Ingredients and Remy Cointreau Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MGP Ingredients and Remy Cointreau
The main advantage of trading using opposite MGP Ingredients and Remy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGP Ingredients 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.MGP Ingredients vs. Brown Forman | MGP Ingredients vs. Diageo PLC ADR | MGP Ingredients vs. Brown Forman | MGP Ingredients vs. Constellation Brands Class |
Remy Cointreau vs. Diageo PLC ADR | Remy Cointreau vs. Constellation Brands Class | Remy Cointreau vs. Brown Forman | Remy Cointreau vs. Davide Campari Milano NV |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |