Correlation Between Salvatore Ferragamo and Hermes International
Can any of the company-specific risk be diversified away by investing in both Salvatore Ferragamo and Hermes International 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 Salvatore Ferragamo and Hermes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salvatore Ferragamo SpA and Hermes International SA, you can compare the effects of market volatilities on Salvatore Ferragamo and Hermes International 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 Salvatore Ferragamo with a short position of Hermes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salvatore Ferragamo and Hermes International.
Diversification Opportunities for Salvatore Ferragamo and Hermes International
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salvatore and Hermes is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Salvatore Ferragamo SpA and Hermes International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hermes International and Salvatore Ferragamo 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 Salvatore Ferragamo SpA are associated (or correlated) with Hermes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hermes International has no effect on the direction of Salvatore Ferragamo i.e., Salvatore Ferragamo and Hermes International go up and down completely randomly.
Pair Corralation between Salvatore Ferragamo and Hermes International
Assuming the 90 days horizon Salvatore Ferragamo SpA is expected to under-perform the Hermes International. In addition to that, Salvatore Ferragamo is 2.01 times more volatile than Hermes International SA. It trades about -0.21 of its total potential returns per unit of risk. Hermes International SA is currently generating about -0.07 per unit of volatility. If you would invest 26,028 in Hermes International SA on January 25, 2024 and sell it today you would lose (588.00) from holding Hermes International SA or give up 2.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Salvatore Ferragamo SpA vs. Hermes International SA
Performance |
Timeline |
Salvatore Ferragamo SpA |
Hermes International |
Salvatore Ferragamo and Hermes International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Salvatore Ferragamo and Hermes International
The main advantage of trading using opposite Salvatore Ferragamo and Hermes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salvatore Ferragamo position performs unexpectedly, Hermes International 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 Hermes International will offset losses from the drop in Hermes International's long position.Salvatore Ferragamo vs. Axalta Coating Systems | Salvatore Ferragamo vs. Hudson Technologies | Salvatore Ferragamo vs. Stepan Company | Salvatore Ferragamo vs. Strategic Oil and |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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