Correlation Between PLAYTIKA HOLDING and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING 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 PLAYTIKA HOLDING and ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTIKA HOLDING DL 01 and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on PLAYTIKA HOLDING 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 PLAYTIKA HOLDING with a short position of ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and ESSILORLUXOTTICA.
Diversification Opportunities for PLAYTIKA HOLDING and ESSILORLUXOTTICA
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLAYTIKA and ESSILORLUXOTTICA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01 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 12ON has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between PLAYTIKA HOLDING and ESSILORLUXOTTICA
Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the ESSILORLUXOTTICA. In addition to that, PLAYTIKA HOLDING is 1.86 times more volatile than ESSILORLUXOTTICA 12ON. It trades about -0.01 of its total potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.1 per unit of volatility. If you would invest 7,442 in ESSILORLUXOTTICA 12ON on December 1, 2024 and sell it today you would earn a total of 7,058 from holding ESSILORLUXOTTICA 12ON or generate 94.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYTIKA HOLDING DL 01 vs. ESSILORLUXOTTICA 12ON
Performance |
| Timeline |
| PLAYTIKA HOLDING |
| ESSILORLUXOTTICA 12ON |
PLAYTIKA HOLDING and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYTIKA HOLDING and ESSILORLUXOTTICA
The main advantage of trading using opposite PLAYTIKA HOLDING and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING 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.| PLAYTIKA HOLDING vs. Air Lease | PLAYTIKA HOLDING vs. Sterling Construction | PLAYTIKA HOLDING vs. ALBIS LEASING AG | PLAYTIKA HOLDING vs. Dairy Farm International |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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