Correlation Between Coloplast A/S and Essilor International
Can any of the company-specific risk be diversified away by investing in both Coloplast A/S 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 Coloplast A/S and Essilor International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloplast AS and Essilor International SA, you can compare the effects of market volatilities on Coloplast A/S 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 Coloplast A/S with a short position of Essilor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast A/S and Essilor International.
Diversification Opportunities for Coloplast A/S and Essilor International
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Coloplast and Essilor is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast AS and Essilor International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essilor International 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 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 Coloplast A/S i.e., Coloplast A/S and Essilor International go up and down completely randomly.
Pair Corralation between Coloplast A/S and Essilor International
Assuming the 90 days horizon Coloplast AS is expected to under-perform the Essilor International. In addition to that, Coloplast A/S is 1.44 times more volatile than Essilor International SA. It trades about -0.12 of its total potential returns per unit of risk. Essilor International SA is currently generating about 0.1 per unit of volatility. If you would invest 11,884 in Essilor International SA on August 24, 2024 and sell it today you would earn a total of 294.00 from holding Essilor International SA or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloplast AS vs. Essilor International SA
Performance |
| Timeline |
| Coloplast A/S |
| Essilor International |
Coloplast A/S and Essilor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloplast A/S and Essilor International
The main advantage of trading using opposite Coloplast A/S and Essilor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast A/S 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.| Coloplast A/S vs. CeCors Inc | Coloplast A/S vs. GlucoTrack | Coloplast A/S vs. Sharps Technology | Coloplast A/S vs. Wearable Health Solutions |
| Essilor International vs. CeCors Inc | Essilor International vs. GlucoTrack | Essilor International vs. Sharps Technology | Essilor International vs. Wearable Health Solutions |
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 Stocks Directory module to find actively traded stocks across global markets.
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