Correlation Between SARTORIUS and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both SARTORIUS 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 SARTORIUS and ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SARTORIUS AG UNSPADR and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on SARTORIUS 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 SARTORIUS with a short position of ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SARTORIUS and ESSILORLUXOTTICA.
Diversification Opportunities for SARTORIUS and ESSILORLUXOTTICA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SARTORIUS and ESSILORLUXOTTICA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding SARTORIUS AG UNSPADR and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON and SARTORIUS 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 SARTORIUS AG UNSPADR 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 SARTORIUS i.e., SARTORIUS and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between SARTORIUS and ESSILORLUXOTTICA
Assuming the 90 days trading horizon SARTORIUS AG UNSPADR is not expected to generate positive returns. Moreover, SARTORIUS is 2.33 times more volatile than ESSILORLUXOTTICA 12ON. It trades away all of its potential returns to assume current level of volatility. ESSILORLUXOTTICA 12ON is currently generating about 0.06 per unit of risk. 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SARTORIUS AG UNSPADR vs. ESSILORLUXOTTICA 12ON
Performance |
| Timeline |
| SARTORIUS AG UNSPADR |
| ESSILORLUXOTTICA 12ON |
SARTORIUS and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SARTORIUS and ESSILORLUXOTTICA
The main advantage of trading using opposite SARTORIUS and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SARTORIUS 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.| SARTORIUS vs. ESSILORLUXOTTICA 12ON | SARTORIUS vs. Intuitive Surgical | SARTORIUS vs. EssilorLuxottica Socit anonyme | SARTORIUS vs. HOYA Corporation |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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