Correlation Between ESSILORLUXOTTICA and Wienerberger
Can any of the company-specific risk be diversified away by investing in both ESSILORLUXOTTICA and Wienerberger 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 Wienerberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESSILORLUXOTTICA 12ON and Wienerberger AG, you can compare the effects of market volatilities on ESSILORLUXOTTICA and Wienerberger 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 Wienerberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSILORLUXOTTICA and Wienerberger.
Diversification Opportunities for ESSILORLUXOTTICA and Wienerberger
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ESSILORLUXOTTICA and Wienerberger is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding ESSILORLUXOTTICA 12ON and Wienerberger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wienerberger AG 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 Wienerberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wienerberger AG has no effect on the direction of ESSILORLUXOTTICA i.e., ESSILORLUXOTTICA and Wienerberger go up and down completely randomly.
Pair Corralation between ESSILORLUXOTTICA and Wienerberger
Assuming the 90 days trading horizon ESSILORLUXOTTICA 12ON is expected to generate 0.68 times more return on investment than Wienerberger. However, ESSILORLUXOTTICA 12ON is 1.47 times less risky than Wienerberger. It trades about 0.28 of its potential returns per unit of risk. Wienerberger AG is currently generating about -0.09 per unit of risk. If you would invest 10,600 in ESSILORLUXOTTICA 12ON on August 30, 2024 and sell it today you would earn a total of 800.00 from holding ESSILORLUXOTTICA 12ON or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESSILORLUXOTTICA 12ON vs. Wienerberger AG
Performance |
| Timeline |
| ESSILORLUXOTTICA 12ON |
| Wienerberger AG |
ESSILORLUXOTTICA and Wienerberger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESSILORLUXOTTICA and Wienerberger
The main advantage of trading using opposite ESSILORLUXOTTICA and Wienerberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSILORLUXOTTICA position performs unexpectedly, Wienerberger 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 Wienerberger will offset losses from the drop in Wienerberger's long position.| ESSILORLUXOTTICA vs. Alaska Air Group | ESSILORLUXOTTICA vs. Enter Air SA | ESSILORLUXOTTICA vs. Wizz Air Holdings | ESSILORLUXOTTICA vs. Canon Marketing Japan |
| Wienerberger vs. PROSIEBENSAT1 MEDIADR4 | Wienerberger vs. Beijing Media | Wienerberger vs. THAI BEVERAGE | Wienerberger vs. Thai Beverage Public |
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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