Correlation Between Reckitt Benckiser and Danone SA
Can any of the company-specific risk be diversified away by investing in both Reckitt Benckiser and Danone SA 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 Reckitt Benckiser and Danone SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reckitt Benckiser Group and Danone SA, you can compare the effects of market volatilities on Reckitt Benckiser and Danone SA 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 Reckitt Benckiser with a short position of Danone SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reckitt Benckiser and Danone SA.
Diversification Opportunities for Reckitt Benckiser and Danone SA
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Reckitt and Danone is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Reckitt Benckiser Group and Danone SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danone SA and Reckitt Benckiser 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 Reckitt Benckiser Group are associated (or correlated) with Danone SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danone SA has no effect on the direction of Reckitt Benckiser i.e., Reckitt Benckiser and Danone SA go up and down completely randomly.
Pair Corralation between Reckitt Benckiser and Danone SA
Assuming the 90 days horizon Reckitt Benckiser is expected to generate 3.85 times less return on investment than Danone SA. But when comparing it to its historical volatility, Reckitt Benckiser Group is 1.32 times less risky than Danone SA. It trades about 0.03 of its potential returns per unit of risk. Danone SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8,440 in Danone SA on August 27, 2025 and sell it today you would earn a total of 560.00 from holding Danone SA or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reckitt Benckiser Group vs. Danone SA
Performance |
| Timeline |
| Reckitt Benckiser |
| Danone SA |
Reckitt Benckiser and Danone SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reckitt Benckiser and Danone SA
The main advantage of trading using opposite Reckitt Benckiser and Danone SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reckitt Benckiser position performs unexpectedly, Danone SA 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 Danone SA will offset losses from the drop in Danone SA's long position.| Reckitt Benckiser vs. Dongjiang Environmental | Reckitt Benckiser vs. Ironstone Group | Reckitt Benckiser vs. NanoTech Entertainment | Reckitt Benckiser vs. CECO Environmental Corp |
| Danone SA vs. Comtech Telecommunications Corp | Danone SA vs. World Houseware Limited | Danone SA vs. ISPAF | Danone SA vs. Khiron Life Sciences |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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