Correlation Between ESSILORLUXOTTICA and HomeToGo
Can any of the company-specific risk be diversified away by investing in both ESSILORLUXOTTICA and HomeToGo 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 HomeToGo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESSILORLUXOTTICA 12ON and HomeToGo SE, you can compare the effects of market volatilities on ESSILORLUXOTTICA and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSILORLUXOTTICA and HomeToGo.
Diversification Opportunities for ESSILORLUXOTTICA and HomeToGo
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ESSILORLUXOTTICA and HomeToGo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ESSILORLUXOTTICA 12ON and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of ESSILORLUXOTTICA i.e., ESSILORLUXOTTICA and HomeToGo go up and down completely randomly.
Pair Corralation between ESSILORLUXOTTICA and HomeToGo
Assuming the 90 days trading horizon ESSILORLUXOTTICA 12ON is expected to generate 0.4 times more return on investment than HomeToGo. However, ESSILORLUXOTTICA 12ON is 2.52 times less risky than HomeToGo. It trades about 0.19 of its potential returns per unit of risk. HomeToGo SE is currently generating about 0.01 per unit of risk. If you would invest 10,800 in ESSILORLUXOTTICA 12ON on September 4, 2024 and sell it today you would earn a total of 500.00 from holding ESSILORLUXOTTICA 12ON or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ESSILORLUXOTTICA 12ON vs. HomeToGo SE
Performance |
| Timeline |
| ESSILORLUXOTTICA 12ON |
| HomeToGo SE |
ESSILORLUXOTTICA and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESSILORLUXOTTICA and HomeToGo
The main advantage of trading using opposite ESSILORLUXOTTICA and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSILORLUXOTTICA position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| ESSILORLUXOTTICA vs. KB HOME | ESSILORLUXOTTICA vs. INTERSHOP Communications Aktiengesellschaft | ESSILORLUXOTTICA vs. Corporate Office Properties | ESSILORLUXOTTICA vs. Taylor Morrison Home |
| HomeToGo vs. Alphabet Class A | HomeToGo vs. Meta Platforms | HomeToGo vs. Meta Platforms | HomeToGo vs. Prosus NV |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |