Correlation Between Canadian Utilities and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities 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 Canadian Utilities and ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on Canadian Utilities 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 Canadian Utilities with a short position of ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and ESSILORLUXOTTICA.
Diversification Opportunities for Canadian Utilities and ESSILORLUXOTTICA
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canadian and ESSILORLUXOTTICA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON and Canadian Utilities 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 Canadian Utilities Limited 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 Canadian Utilities i.e., Canadian Utilities and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between Canadian Utilities and ESSILORLUXOTTICA
Assuming the 90 days horizon Canadian Utilities is expected to generate 8.68 times less return on investment than ESSILORLUXOTTICA. But when comparing it to its historical volatility, Canadian Utilities Limited is 1.21 times less risky than ESSILORLUXOTTICA. It trades about 0.05 of its potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 11,400 in ESSILORLUXOTTICA 12ON on October 22, 2024 and sell it today you would earn a total of 700.00 from holding ESSILORLUXOTTICA 12ON or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Canadian Utilities Limited vs. ESSILORLUXOTTICA 12ON
Performance |
| Timeline |
| Canadian Utilities |
| ESSILORLUXOTTICA 12ON |
Canadian Utilities and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and ESSILORLUXOTTICA
The main advantage of trading using opposite Canadian Utilities and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities 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.| Canadian Utilities vs. Erste Group Bank | Canadian Utilities vs. ASPEN TECHINC DL | Canadian Utilities vs. BANKINTER ADR 2007 | Canadian Utilities vs. Agilent Technologies |
| ESSILORLUXOTTICA vs. Iridium Communications | ESSILORLUXOTTICA vs. CITY OFFICE REIT | ESSILORLUXOTTICA vs. CENTURIA OFFICE REIT | ESSILORLUXOTTICA vs. AAC TECHNOLOGHLDGADR |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |