Correlation Between Essilor International and Straumann Holding
Can any of the company-specific risk be diversified away by investing in both Essilor International and Straumann Holding 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 Straumann Holding 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 Straumann Holding AG, you can compare the effects of market volatilities on Essilor International and Straumann Holding 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 Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essilor International and Straumann Holding.
Diversification Opportunities for Essilor International and Straumann Holding
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Essilor and Straumann is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Essilor International SA and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding 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 Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Essilor International i.e., Essilor International and Straumann Holding go up and down completely randomly.
Pair Corralation between Essilor International and Straumann Holding
Assuming the 90 days horizon Essilor International SA is expected to generate 0.52 times more return on investment than Straumann Holding. However, Essilor International SA is 1.93 times less risky than Straumann Holding. It trades about 0.1 of its potential returns per unit of risk. Straumann Holding AG is currently generating about -0.32 per unit of risk. If you would invest 11,884 in Essilor International SA on August 24, 2024 and sell it today you would earn a total of 294.00 from holding Essilor International SA or generate 2.47% 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. Straumann Holding AG
Performance |
| Timeline |
| Essilor International |
| Straumann Holding |
Essilor International and Straumann Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essilor International and Straumann Holding
The main advantage of trading using opposite Essilor International and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essilor International position performs unexpectedly, Straumann Holding 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.| Essilor International vs. BioLife Sciences | Essilor International vs. CeCors Inc | Essilor International vs. GlucoTrack | Essilor International vs. Sharps Technology |
| Straumann Holding vs. Sysmex Corp | Straumann Holding vs. Coloplast AS | Straumann Holding vs. Essilor International SA | Straumann Holding 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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