Correlation Between Kering SA and EssilorLuxottica
Can any of the company-specific risk be diversified away by investing in both Kering SA and EssilorLuxottica 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 Kering SA and EssilorLuxottica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kering SA and EssilorLuxottica S A, you can compare the effects of market volatilities on Kering SA and EssilorLuxottica 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 Kering SA with a short position of EssilorLuxottica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and EssilorLuxottica.
Diversification Opportunities for Kering SA and EssilorLuxottica
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kering and EssilorLuxottica is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and EssilorLuxottica S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EssilorLuxottica S and Kering SA 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 Kering SA are associated (or correlated) with EssilorLuxottica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EssilorLuxottica S has no effect on the direction of Kering SA i.e., Kering SA and EssilorLuxottica go up and down completely randomly.
Pair Corralation between Kering SA and EssilorLuxottica
Assuming the 90 days trading horizon Kering SA is expected to under-perform the EssilorLuxottica. In addition to that, Kering SA is 1.59 times more volatile than EssilorLuxottica S A. It trades about -0.07 of its total potential returns per unit of risk. EssilorLuxottica S A is currently generating about 0.05 per unit of volatility. If you would invest 17,694 in EssilorLuxottica S A on September 3, 2024 and sell it today you would earn a total of 5,286 from holding EssilorLuxottica S A or generate 29.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kering SA vs. EssilorLuxottica S A
Performance |
| Timeline |
| Kering SA |
| EssilorLuxottica S |
Kering SA and EssilorLuxottica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kering SA and EssilorLuxottica
The main advantage of trading using opposite Kering SA and EssilorLuxottica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kering SA position performs unexpectedly, EssilorLuxottica 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 EssilorLuxottica will offset losses from the drop in EssilorLuxottica's long position.| Kering SA vs. Hermes International SCA | Kering SA vs. LVMH Mot Hennessy | Kering SA vs. LOreal SA | Kering SA vs. Pernod Ricard SA |
| EssilorLuxottica vs. Pernod Ricard SA | EssilorLuxottica vs. LOreal SA | EssilorLuxottica vs. Kering SA | EssilorLuxottica vs. Hermes International SCA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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