Correlation Between Rémy Cointreau and Lear
Can any of the company-specific risk be diversified away by investing in both Rémy Cointreau and Lear 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 Rémy Cointreau and Lear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rmy Cointreau SA and Lear Corporation, you can compare the effects of market volatilities on Rémy Cointreau and Lear 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 Rémy Cointreau with a short position of Lear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rémy Cointreau and Lear.
Diversification Opportunities for Rémy Cointreau and Lear
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rémy and Lear is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Rmy Cointreau SA and Lear Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lear and Rémy Cointreau 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 Rmy Cointreau SA are associated (or correlated) with Lear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lear has no effect on the direction of Rémy Cointreau i.e., Rémy Cointreau and Lear go up and down completely randomly.
Pair Corralation between Rémy Cointreau and Lear
Assuming the 90 days horizon Rmy Cointreau SA is expected to generate 1.46 times more return on investment than Lear. However, Rémy Cointreau is 1.46 times more volatile than Lear Corporation. It trades about 0.03 of its potential returns per unit of risk. Lear Corporation is currently generating about -0.19 per unit of risk. If you would invest 9,904 in Rmy Cointreau SA on January 25, 2024 and sell it today you would earn a total of 87.00 from holding Rmy Cointreau SA or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rmy Cointreau SA vs. Lear Corp.
Performance |
| Timeline |
| Rmy Cointreau SA |
| Lear |
Rémy Cointreau and Lear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rémy Cointreau and Lear
The main advantage of trading using opposite Rémy Cointreau and Lear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rémy Cointreau position performs unexpectedly, Lear 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 Lear will offset losses from the drop in Lear's long position.| Rémy Cointreau vs. Diageo PLC ADR | Rémy Cointreau vs. Pernod Ricard SA | Rémy Cointreau vs. Constellation Brands Class | Rémy Cointreau vs. Brown Forman |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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