Correlation Between Olympus and Essilor International
Can any of the company-specific risk be diversified away by investing in both Olympus 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 Olympus and Essilor International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympus and Essilor International SA, you can compare the effects of market volatilities on Olympus 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 Olympus with a short position of Essilor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympus and Essilor International.
Diversification Opportunities for Olympus and Essilor International
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Olympus and Essilor is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Olympus and Essilor International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essilor International and Olympus 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 Olympus 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 Olympus i.e., Olympus and Essilor International go up and down completely randomly.
Pair Corralation between Olympus and Essilor International
Assuming the 90 days horizon Olympus is expected to generate 4.24 times less return on investment than Essilor International. In addition to that, Olympus is 1.94 times more volatile than Essilor International SA. It trades about 0.01 of its total potential returns per unit of risk. Essilor International SA is currently generating about 0.06 per unit of volatility. If you would invest 11,175 in Essilor International SA on September 1, 2024 and sell it today you would earn a total of 983.00 from holding Essilor International SA or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Olympus vs. Essilor International SA
Performance |
| Timeline |
| Olympus |
| Essilor International |
Olympus and Essilor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympus and Essilor International
The main advantage of trading using opposite Olympus and Essilor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympus 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.| Olympus vs. Sysmex Corp | Olympus vs. Coloplast AS | Olympus vs. Essilor International SA | Olympus vs. Coloplast A |
| Essilor International vs. Sysmex Corp | Essilor International vs. Straumann Holding AG | Essilor International vs. Coloplast AS | Essilor International 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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