Correlation Between Essilor International and Ansell
Can any of the company-specific risk be diversified away by investing in both Essilor International 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 Essilor International and Ansell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Essilor International SA and Ansell Ltd ADR, you can compare the effects of market volatilities on Essilor International 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 Essilor International with a short position of Ansell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essilor International and Ansell.
Diversification Opportunities for Essilor International and Ansell
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Essilor and Ansell is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Essilor International SA 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 Essilor International 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 Essilor International SA 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 Essilor International i.e., Essilor International and Ansell go up and down completely randomly.
Pair Corralation between Essilor International and Ansell
If you would invest 9,082 in Essilor International SA on November 2, 2024 and sell it today you would earn a total of 4,711 from holding Essilor International SA or generate 51.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.2% |
| Values | Daily Returns |
Essilor International SA vs. Ansell Ltd ADR
Performance |
| Timeline |
| Essilor International |
| Ansell Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Essilor International and Ansell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essilor International and Ansell
The main advantage of trading using opposite Essilor International and Ansell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essilor International 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.| Essilor International vs. Sysmex Corp | Essilor International vs. Straumann Holding AG | Essilor International vs. Coloplast AS | Essilor International vs. EssilorLuxottica Socit anonyme |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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