Correlation Between Biophytis and EssilorLuxottica
Can any of the company-specific risk be diversified away by investing in both Biophytis 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 Biophytis and EssilorLuxottica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biophytis SA and EssilorLuxottica S A, you can compare the effects of market volatilities on Biophytis 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 Biophytis with a short position of EssilorLuxottica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biophytis and EssilorLuxottica.
Diversification Opportunities for Biophytis and EssilorLuxottica
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Biophytis and EssilorLuxottica is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Biophytis SA and EssilorLuxottica S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EssilorLuxottica S and Biophytis 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 Biophytis SA 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 S has no effect on the direction of Biophytis i.e., Biophytis and EssilorLuxottica go up and down completely randomly.
Pair Corralation between Biophytis and EssilorLuxottica
Assuming the 90 days trading horizon Biophytis is expected to generate 1.32 times less return on investment than EssilorLuxottica. In addition to that, Biophytis is 4.61 times more volatile than EssilorLuxottica S A. It trades about 0.02 of its total potential returns per unit of risk. EssilorLuxottica S A is currently generating about 0.13 per unit of volatility. If you would invest 22,360 in EssilorLuxottica S A on September 6, 2024 and sell it today you would earn a total of 620.00 from holding EssilorLuxottica S A or generate 2.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Biophytis SA vs. EssilorLuxottica S A
Performance |
Timeline |
Biophytis SA |
EssilorLuxottica S |
Biophytis and EssilorLuxottica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Biophytis and EssilorLuxottica
The main advantage of trading using opposite Biophytis and EssilorLuxottica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biophytis 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.Biophytis vs. Kalray SA | Biophytis vs. Biosynex | Biophytis vs. Eurobio Scientific SA | Biophytis vs. OSE Pharma SA |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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