Correlation Between EssilorLuxottica and Ansell
Can any of the company-specific risk be diversified away by investing in both EssilorLuxottica and Ansell 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 Ansell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EssilorLuxottica Socit anonyme and Ansell Ltd ADR, you can compare the effects of market volatilities on EssilorLuxottica and Ansell 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 Ansell. Check out your portfolio center. Please also check ongoing floating volatility patterns of EssilorLuxottica and Ansell.
Diversification Opportunities for EssilorLuxottica and Ansell
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EssilorLuxottica and Ansell is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding EssilorLuxottica Socit anonyme and Ansell Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ansell Ltd ADR 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 Socit anonyme are associated (or correlated) with Ansell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ansell Ltd ADR has no effect on the direction of EssilorLuxottica i.e., EssilorLuxottica and Ansell go up and down completely randomly.
Pair Corralation between EssilorLuxottica and Ansell
If you would invest 22,976 in EssilorLuxottica Socit anonyme on August 31, 2024 and sell it today you would earn a total of 1,168 from holding EssilorLuxottica Socit anonyme or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
EssilorLuxottica Socit anonyme vs. Ansell Ltd ADR
Performance |
| Timeline |
| EssilorLuxottica Socit |
| Ansell Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EssilorLuxottica and Ansell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EssilorLuxottica and Ansell
The main advantage of trading using opposite EssilorLuxottica and Ansell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EssilorLuxottica position performs unexpectedly, Ansell 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 Ansell will offset losses from the drop in Ansell's long position.| EssilorLuxottica vs. Sysmex Corp | EssilorLuxottica vs. Coloplast AS | EssilorLuxottica vs. Essilor International SA | EssilorLuxottica vs. Coloplast A |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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