Correlation Between Essilor International and Milestone Scientific
Can any of the company-specific risk be diversified away by investing in both Essilor International and Milestone Scientific 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 Milestone Scientific 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 Milestone Scientific, you can compare the effects of market volatilities on Essilor International and Milestone Scientific 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 Milestone Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essilor International and Milestone Scientific.
Diversification Opportunities for Essilor International and Milestone Scientific
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Essilor and Milestone is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Essilor International SA and Milestone Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milestone Scientific 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 Milestone Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milestone Scientific has no effect on the direction of Essilor International i.e., Essilor International and Milestone Scientific go up and down completely randomly.
Pair Corralation between Essilor International and Milestone Scientific
Assuming the 90 days horizon Essilor International SA is expected to generate 0.25 times more return on investment than Milestone Scientific. However, Essilor International SA is 3.98 times less risky than Milestone Scientific. It trades about 0.15 of its potential returns per unit of risk. Milestone Scientific is currently generating about 0.04 per unit of risk. If you would invest 11,803 in Essilor International SA on August 28, 2024 and sell it today you would earn a total of 456.00 from holding Essilor International SA or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essilor International SA vs. Milestone Scientific
Performance |
| Timeline |
| Essilor International |
| Milestone Scientific |
Essilor International and Milestone Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essilor International and Milestone Scientific
The main advantage of trading using opposite Essilor International and Milestone Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essilor International position performs unexpectedly, Milestone Scientific 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 Milestone Scientific will offset losses from the drop in Milestone Scientific'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 |
| Milestone Scientific vs. InfuSystems Holdings | Milestone Scientific vs. STRATA Skin Sciences | Milestone Scientific vs. Retractable Technologies | Milestone Scientific vs. OncoCyte Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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