Correlation Between Utah Medical and Essilor International
Can any of the company-specific risk be diversified away by investing in both Utah Medical 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 Utah Medical and Essilor International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Utah Medical Products and Essilor International SA, you can compare the effects of market volatilities on Utah Medical 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 Utah Medical with a short position of Essilor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utah Medical and Essilor International.
Diversification Opportunities for Utah Medical and Essilor International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Utah and Essilor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and Essilor International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essilor International and Utah Medical 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 Utah Medical Products 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 Utah Medical i.e., Utah Medical and Essilor International go up and down completely randomly.
Pair Corralation between Utah Medical and Essilor International
Given the investment horizon of 90 days Utah Medical Products is expected to under-perform the Essilor International. In addition to that, Utah Medical is 1.17 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 0.1 per unit of volatility. If you would invest 11,884 in Essilor International SA on August 24, 2024 and sell it today you would earn a total of 294.00 from holding Essilor International SA or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Utah Medical Products vs. Essilor International SA
Performance |
| Timeline |
| Utah Medical Products |
| Essilor International |
Utah Medical and Essilor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Utah Medical and Essilor International
The main advantage of trading using opposite Utah Medical and Essilor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utah Medical 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.| Utah Medical vs. Precision Optics, | Utah Medical vs. Repro Med Systems | Utah Medical vs. InfuSystems Holdings | Utah Medical vs. Milestone Scientific |
| Essilor International vs. CeCors Inc | Essilor International vs. GlucoTrack | Essilor International vs. Sharps Technology | Essilor International vs. Wearable Health Solutions |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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