Correlation Between Coloplast A/S and EssilorLuxottica
Can any of the company-specific risk be diversified away by investing in both Coloplast A/S 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 Coloplast A/S and EssilorLuxottica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloplast AS and EssilorLuxottica Socit anonyme, you can compare the effects of market volatilities on Coloplast A/S 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 Coloplast A/S with a short position of EssilorLuxottica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast A/S and EssilorLuxottica.
Diversification Opportunities for Coloplast A/S and EssilorLuxottica
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coloplast and EssilorLuxottica is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast AS and EssilorLuxottica Socit anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EssilorLuxottica Socit and Coloplast A/S 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 Coloplast AS 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 Coloplast A/S i.e., Coloplast A/S and EssilorLuxottica go up and down completely randomly.
Pair Corralation between Coloplast A/S and EssilorLuxottica
Assuming the 90 days horizon Coloplast AS is expected to under-perform the EssilorLuxottica. But the pink sheet apears to be less risky and, when comparing its historical volatility, Coloplast AS is 1.04 times less risky than EssilorLuxottica. The pink sheet trades about -0.1 of its potential returns per unit of risk. The EssilorLuxottica Socit anonyme is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 23,888 in EssilorLuxottica Socit anonyme on August 28, 2024 and sell it today you would earn a total of 162.00 from holding EssilorLuxottica Socit anonyme or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloplast AS vs. EssilorLuxottica Socit anonyme
Performance |
| Timeline |
| Coloplast A/S |
| EssilorLuxottica Socit |
Coloplast A/S and EssilorLuxottica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloplast A/S and EssilorLuxottica
The main advantage of trading using opposite Coloplast A/S and EssilorLuxottica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast A/S 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.| Coloplast A/S vs. GlucoTrack | Coloplast A/S vs. Sharps Technology | Coloplast A/S vs. Utah Medical Products | Coloplast A/S vs. Innovative Eyewear |
| EssilorLuxottica vs. GlucoTrack | EssilorLuxottica vs. Sharps Technology | EssilorLuxottica vs. Utah Medical Products | EssilorLuxottica vs. Innovative Eyewear |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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