Correlation Between Compagnie Financire and Hermes International
Can any of the company-specific risk be diversified away by investing in both Compagnie Financire 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 Compagnie Financire and Hermes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Financire Richemont and Hermes International SA, you can compare the effects of market volatilities on Compagnie Financire 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 Compagnie Financire with a short position of Hermes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Financire and Hermes International.
Diversification Opportunities for Compagnie Financire and Hermes International
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Compagnie and Hermes is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Financire Richemont and Hermes International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hermes International and Compagnie Financire 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 Compagnie Financire Richemont 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 Compagnie Financire i.e., Compagnie Financire and Hermes International go up and down completely randomly.
Pair Corralation between Compagnie Financire and Hermes International
Assuming the 90 days horizon Compagnie Financire Richemont is expected to generate 1.23 times more return on investment than Hermes International. However, Compagnie Financire is 1.23 times more volatile than Hermes International SA. It trades about 0.12 of its potential returns per unit of risk. Hermes International SA is currently generating about 0.02 per unit of risk. If you would invest 18,274 in Compagnie Financire Richemont on September 10, 2025 and sell it today you would earn a total of 3,031 from holding Compagnie Financire Richemont or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Financire Richemont vs. Hermes International SA
Performance |
| Timeline |
| Compagnie Financire |
| Hermes International |
Compagnie Financire and Hermes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Financire and Hermes International
The main advantage of trading using opposite Compagnie Financire and Hermes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Financire 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.| Compagnie Financire vs. Christian Dior SE | Compagnie Financire vs. Christian Dior SE | Compagnie Financire vs. Fast Retailing Co | Compagnie Financire vs. Fast Retailing Co |
| Hermes International vs. LVMH Mot Hennessy | Hermes International vs. Kering SA | Hermes International vs. Capri Holdings | Hermes International vs. Tapestry |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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