Correlation Between ESSILORLUXOTTICA and Hologic
Can any of the company-specific risk be diversified away by investing in both ESSILORLUXOTTICA and Hologic 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 ESSILORLUXOTTICA and Hologic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESSILORLUXOTTICA 12ON and Hologic, you can compare the effects of market volatilities on ESSILORLUXOTTICA and Hologic 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 ESSILORLUXOTTICA with a short position of Hologic. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSILORLUXOTTICA and Hologic.
Diversification Opportunities for ESSILORLUXOTTICA and Hologic
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ESSILORLUXOTTICA and Hologic is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ESSILORLUXOTTICA 12ON and Hologic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hologic and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA 12ON are associated (or correlated) with Hologic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hologic has no effect on the direction of ESSILORLUXOTTICA i.e., ESSILORLUXOTTICA and Hologic go up and down completely randomly.
Pair Corralation between ESSILORLUXOTTICA and Hologic
Assuming the 90 days trading horizon ESSILORLUXOTTICA 12ON is expected to generate 0.78 times more return on investment than Hologic. However, ESSILORLUXOTTICA 12ON is 1.28 times less risky than Hologic. It trades about -0.09 of its potential returns per unit of risk. Hologic is currently generating about -0.47 per unit of risk. If you would invest 11,600 in ESSILORLUXOTTICA 12ON on September 24, 2024 and sell it today you would lose (200.00) from holding ESSILORLUXOTTICA 12ON or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESSILORLUXOTTICA 12ON vs. Hologic
Performance |
| Timeline |
| ESSILORLUXOTTICA 12ON |
| Hologic |
ESSILORLUXOTTICA and Hologic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESSILORLUXOTTICA and Hologic
The main advantage of trading using opposite ESSILORLUXOTTICA and Hologic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSILORLUXOTTICA position performs unexpectedly, Hologic 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 Hologic will offset losses from the drop in Hologic's long position.| ESSILORLUXOTTICA vs. Intuitive Surgical | ESSILORLUXOTTICA vs. EssilorLuxottica Socit anonyme | ESSILORLUXOTTICA vs. Resmed Inc DRC | ESSILORLUXOTTICA vs. ResMed Inc |
| Hologic vs. ESSILORLUXOTTICA 12ON | Hologic vs. Intuitive Surgical | Hologic vs. EssilorLuxottica Socit anonyme | Hologic vs. Resmed Inc DRC |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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