Correlation Between VIENNA INSURANCE and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both VIENNA INSURANCE 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 VIENNA INSURANCE and ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIENNA INSURANCE GR and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on VIENNA INSURANCE 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 VIENNA INSURANCE with a short position of ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIENNA INSURANCE and ESSILORLUXOTTICA.
Diversification Opportunities for VIENNA INSURANCE and ESSILORLUXOTTICA
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VIENNA and ESSILORLUXOTTICA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding VIENNA INSURANCE GR and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON and VIENNA INSURANCE 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 VIENNA INSURANCE GR 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 VIENNA INSURANCE i.e., VIENNA INSURANCE and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between VIENNA INSURANCE and ESSILORLUXOTTICA
Assuming the 90 days trading horizon VIENNA INSURANCE is expected to generate 1.97 times less return on investment than ESSILORLUXOTTICA. But when comparing it to its historical volatility, VIENNA INSURANCE GR is 1.97 times less risky than ESSILORLUXOTTICA. It trades about 0.43 of its potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 11,400 in ESSILORLUXOTTICA 12ON on October 24, 2024 and sell it today you would earn a total of 800.00 from holding ESSILORLUXOTTICA 12ON or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
VIENNA INSURANCE GR vs. ESSILORLUXOTTICA 12ON
Performance |
| Timeline |
| VIENNA INSURANCE |
| ESSILORLUXOTTICA 12ON |
VIENNA INSURANCE and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIENNA INSURANCE and ESSILORLUXOTTICA
The main advantage of trading using opposite VIENNA INSURANCE and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIENNA INSURANCE 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.| VIENNA INSURANCE vs. Texas Roadhouse | VIENNA INSURANCE vs. EVS Broadcast Equipment | VIENNA INSURANCE vs. Yuexiu Transport Infrastructure | VIENNA INSURANCE vs. GOLD ROAD RES |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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