Correlation Between Prosafe SE and EssilorLuxottica
Can any of the company-specific risk be diversified away by investing in both Prosafe SE and EssilorLuxottica 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 Prosafe SE and EssilorLuxottica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and EssilorLuxottica Socit anonyme, you can compare the effects of market volatilities on Prosafe SE and EssilorLuxottica 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 Prosafe SE with a short position of EssilorLuxottica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and EssilorLuxottica.
Diversification Opportunities for Prosafe SE and EssilorLuxottica
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prosafe and EssilorLuxottica is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and EssilorLuxottica Socit anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EssilorLuxottica Socit and Prosafe SE 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 Prosafe SE are associated (or correlated) with EssilorLuxottica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EssilorLuxottica Socit has no effect on the direction of Prosafe SE i.e., Prosafe SE and EssilorLuxottica go up and down completely randomly.
Pair Corralation between Prosafe SE and EssilorLuxottica
Assuming the 90 days horizon Prosafe SE is expected to under-perform the EssilorLuxottica. In addition to that, Prosafe SE is 4.79 times more volatile than EssilorLuxottica Socit anonyme. It trades about -0.41 of its total potential returns per unit of risk. EssilorLuxottica Socit anonyme is currently generating about 0.11 per unit of volatility. If you would invest 21,510 in EssilorLuxottica Socit anonyme on August 29, 2024 and sell it today you would earn a total of 1,720 from holding EssilorLuxottica Socit anonyme or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. EssilorLuxottica Socit anonyme
Performance |
| Timeline |
| Prosafe SE |
| EssilorLuxottica Socit |
Prosafe SE and EssilorLuxottica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and EssilorLuxottica
The main advantage of trading using opposite Prosafe SE and EssilorLuxottica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, EssilorLuxottica 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 EssilorLuxottica will offset losses from the drop in EssilorLuxottica's long position.| Prosafe SE vs. Scientific Games | Prosafe SE vs. HEALTHCARE REAL A | Prosafe SE vs. OURGAME INTHOLDL 00005 | Prosafe SE vs. Hochschild Mining plc |
| EssilorLuxottica vs. Cars Inc | EssilorLuxottica vs. Grupo Carso SAB | EssilorLuxottica vs. Commercial Vehicle Group | EssilorLuxottica vs. KENEDIX OFFICE INV |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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