Correlation Between La Savonnerie and Remy Cointreau

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

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

Diversification Opportunities for La Savonnerie and Remy Cointreau

0.37

Correlation Coefficient

La Savonnerie  Remy Cointreau

Weak diversification

The 3 months correlation between MLSDN and Remy is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding La Savonnerie de and Remy Cointreau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remy Cointreau and La Savonnerie 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 La Savonnerie de 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 La Savonnerie i.e., La Savonnerie and Remy Cointreau go up and down completely randomly.

Pair Corralation between La Savonnerie and Remy Cointreau

Assuming the 90 days trading horizon La Savonnerie de is expected to generate 1.38 times more return on investment than Remy Cointreau. However, La Savonnerie is 1.38 times more volatile than Remy Cointreau. It trades about 0.01 of its potential returns per unit of risk. Remy Cointreau is currently generating about -0.15 per unit of risk. If you would invest  2,700  in La Savonnerie de on December 22, 2024 and sell it today you would lose (40.00) from holding La Savonnerie de or give up 1.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

La Savonnerie de  vs.  Remy Cointreau

La Savonnerie de

Risk-Adjusted Performance

Very Weak

Over the last 90 days La Savonnerie de has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, La Savonnerie is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Remy Cointreau

Risk-Adjusted Performance

Very Weak

Over the last 90 days Remy Cointreau has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with La Savonnerie and Remy Cointreau

The main advantage of trading using opposite La Savonnerie and Remy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if La Savonnerie 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 La Savonnerie de 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.