Correlation Between Essilor International and Utah Medical
Can any of the company-specific risk be diversified away by investing in both Essilor International and Utah Medical 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 Utah Medical 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 Utah Medical Products, you can compare the effects of market volatilities on Essilor International and Utah Medical 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 Utah Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essilor International and Utah Medical.
Diversification Opportunities for Essilor International and Utah Medical
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Essilor and Utah is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Essilor International SA and Utah Medical Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utah Medical Products 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 Utah Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utah Medical Products has no effect on the direction of Essilor International i.e., Essilor International and Utah Medical go up and down completely randomly.
Pair Corralation between Essilor International and Utah Medical
Assuming the 90 days horizon Essilor International SA is expected to generate 0.83 times more return on investment than Utah Medical. However, Essilor International SA is 1.21 times less risky than Utah Medical. It trades about 0.15 of its potential returns per unit of risk. Utah Medical Products is currently generating about 0.09 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essilor International SA vs. Utah Medical Products
Performance |
| Timeline |
| Essilor International |
| Utah Medical Products |
Essilor International and Utah Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essilor International and Utah Medical
The main advantage of trading using opposite Essilor International and Utah Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essilor International position performs unexpectedly, Utah Medical 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 Utah Medical will offset losses from the drop in Utah Medical'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 |
| Utah Medical vs. Precision Optics, | Utah Medical vs. Repro Med Systems | Utah Medical vs. InfuSystems Holdings | Utah Medical vs. Milestone Scientific |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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