Correlation Between Milestone Scientific and Essilor International
Can any of the company-specific risk be diversified away by investing in both Milestone Scientific and Essilor International 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 Milestone Scientific and Essilor International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Milestone Scientific and Essilor International SA, you can compare the effects of market volatilities on Milestone Scientific and Essilor International 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 Milestone Scientific with a short position of Essilor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Milestone Scientific and Essilor International.
Diversification Opportunities for Milestone Scientific and Essilor International
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Milestone and Essilor is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Milestone Scientific and Essilor International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essilor International and Milestone Scientific 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 Milestone Scientific are associated (or correlated) with Essilor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essilor International has no effect on the direction of Milestone Scientific i.e., Milestone Scientific and Essilor International go up and down completely randomly.
Pair Corralation between Milestone Scientific and Essilor International
Given the investment horizon of 90 days Milestone Scientific is expected to generate 1.09 times less return on investment than Essilor International. In addition to that, Milestone Scientific is 3.98 times more volatile than Essilor International SA. It trades about 0.04 of its total potential returns per unit of risk. Essilor International SA is currently generating about 0.15 per unit of volatility. 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Milestone Scientific vs. Essilor International SA
Performance |
| Timeline |
| Milestone Scientific |
| Essilor International |
Milestone Scientific and Essilor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Milestone Scientific and Essilor International
The main advantage of trading using opposite Milestone Scientific and Essilor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Milestone Scientific position performs unexpectedly, Essilor International 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 Essilor International will offset losses from the drop in Essilor International's long position.| Milestone Scientific vs. InfuSystems Holdings | Milestone Scientific vs. STRATA Skin Sciences | Milestone Scientific vs. Retractable Technologies | Milestone Scientific vs. OncoCyte Corp |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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