Correlation Between Chugai Pharmaceutical and Essilor International
Can any of the company-specific risk be diversified away by investing in both Chugai Pharmaceutical and Essilor 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 Chugai Pharmaceutical and Essilor International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chugai Pharmaceutical Co and Essilor International SA, you can compare the effects of market volatilities on Chugai Pharmaceutical and Essilor 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 Chugai Pharmaceutical with a short position of Essilor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chugai Pharmaceutical and Essilor International.
Diversification Opportunities for Chugai Pharmaceutical and Essilor International
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chugai and Essilor is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chugai Pharmaceutical Co and Essilor International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essilor International and Chugai Pharmaceutical 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 Chugai Pharmaceutical Co are associated (or correlated) with Essilor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essilor International has no effect on the direction of Chugai Pharmaceutical i.e., Chugai Pharmaceutical and Essilor International go up and down completely randomly.
Pair Corralation between Chugai Pharmaceutical and Essilor International
Assuming the 90 days horizon Chugai Pharmaceutical Co is expected to under-perform the Essilor International. In addition to that, Chugai Pharmaceutical is 2.03 times more volatile than Essilor International SA. It trades about -0.18 of its total potential returns per unit of risk. Essilor International SA is currently generating about 0.18 per unit of volatility. If you would invest 11,612 in Essilor International SA on August 31, 2024 and sell it today you would earn a total of 546.00 from holding Essilor International SA or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chugai Pharmaceutical Co vs. Essilor International SA
Performance |
| Timeline |
| Chugai Pharmaceutical |
| Essilor International |
Chugai Pharmaceutical and Essilor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chugai Pharmaceutical and Essilor International
The main advantage of trading using opposite Chugai Pharmaceutical and Essilor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chugai Pharmaceutical position performs unexpectedly, Essilor 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 Essilor International will offset losses from the drop in Essilor International's long position.| Chugai Pharmaceutical vs. Scilex Holding | Chugai Pharmaceutical vs. Merck Company | Chugai Pharmaceutical vs. Johnson Johnson | Chugai Pharmaceutical vs. Pfizer Inc |
| Essilor International vs. Sysmex Corp | Essilor International vs. Coloplast AS | Essilor International vs. EssilorLuxottica Socit anonyme | Essilor International vs. Coloplast A |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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