Correlation Between Lundin Energy and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both Lundin Energy 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 Lundin Energy and ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lundin Energy AB and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on Lundin Energy 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 Lundin Energy with a short position of ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lundin Energy and ESSILORLUXOTTICA.
Diversification Opportunities for Lundin Energy and ESSILORLUXOTTICA
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lundin and ESSILORLUXOTTICA is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lundin Energy AB and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON and Lundin Energy 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 Lundin Energy AB 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 12ON has no effect on the direction of Lundin Energy i.e., Lundin Energy and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between Lundin Energy and ESSILORLUXOTTICA
Assuming the 90 days horizon Lundin Energy AB is expected to under-perform the ESSILORLUXOTTICA. In addition to that, Lundin Energy is 2.56 times more volatile than ESSILORLUXOTTICA 12ON. It trades about -0.06 of its total potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.06 per unit of volatility. If you would invest 10,300 in ESSILORLUXOTTICA 12ON on September 1, 2024 and sell it today you would earn a total of 1,000.00 from holding ESSILORLUXOTTICA 12ON or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lundin Energy AB vs. ESSILORLUXOTTICA 12ON
Performance |
| Timeline |
| Lundin Energy AB |
| ESSILORLUXOTTICA 12ON |
Lundin Energy and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lundin Energy and ESSILORLUXOTTICA
The main advantage of trading using opposite Lundin Energy and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lundin Energy 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.| Lundin Energy vs. Air New Zealand | Lundin Energy vs. Corsair Gaming | Lundin Energy vs. Gaztransport Technigaz SA | Lundin Energy vs. Alaska Air Group |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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