Correlation Between Essilor International and Olympus
Can any of the company-specific risk be diversified away by investing in both Essilor International and Olympus 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 Olympus 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 Olympus, you can compare the effects of market volatilities on Essilor International and Olympus 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 Olympus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essilor International and Olympus.
Diversification Opportunities for Essilor International and Olympus
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Essilor and Olympus is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Essilor International SA and Olympus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olympus 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 Olympus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olympus has no effect on the direction of Essilor International i.e., Essilor International and Olympus go up and down completely randomly.
Pair Corralation between Essilor International and Olympus
Assuming the 90 days horizon Essilor International SA is expected to generate 0.56 times more return on investment than Olympus. However, Essilor International SA is 1.78 times less risky than Olympus. It trades about 0.15 of its potential returns per unit of risk. Olympus is currently generating about -0.09 per unit of risk. If you would invest 11,689 in Essilor International SA on September 1, 2024 and sell it today you would earn a total of 445.00 from holding Essilor International SA or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essilor International SA vs. Olympus
Performance |
| Timeline |
| Essilor International |
| Olympus |
Essilor International and Olympus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essilor International and Olympus
The main advantage of trading using opposite Essilor International and Olympus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essilor International position performs unexpectedly, Olympus 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 Olympus will offset losses from the drop in Olympus' long position.| Essilor International vs. Sysmex Corp | Essilor International vs. Straumann Holding AG | Essilor International vs. Coloplast AS | Essilor International vs. EssilorLuxottica Socit anonyme |
| Olympus vs. Sysmex Corp | Olympus vs. Coloplast AS | Olympus vs. Essilor International SA | Olympus 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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