Correlation Between Carmat SA and ESSILORLUXOTTICA
Can any of the company-specific risk be diversified away by investing in both Carmat SA 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 Carmat SA and ESSILORLUXOTTICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and ESSILORLUXOTTICA 12ON, you can compare the effects of market volatilities on Carmat SA 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 Carmat SA with a short position of ESSILORLUXOTTICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and ESSILORLUXOTTICA.
Diversification Opportunities for Carmat SA and ESSILORLUXOTTICA
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carmat and ESSILORLUXOTTICA is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and ESSILORLUXOTTICA 12ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSILORLUXOTTICA 12ON and Carmat SA 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 Carmat SA 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 Carmat SA i.e., Carmat SA and ESSILORLUXOTTICA go up and down completely randomly.
Pair Corralation between Carmat SA and ESSILORLUXOTTICA
Assuming the 90 days horizon Carmat SA is expected to under-perform the ESSILORLUXOTTICA. In addition to that, Carmat SA is 4.03 times more volatile than ESSILORLUXOTTICA 12ON. It trades about -0.11 of its total potential returns per unit of risk. ESSILORLUXOTTICA 12ON is currently generating about 0.16 per unit of volatility. If you would invest 10,000 in ESSILORLUXOTTICA 12ON on September 24, 2024 and sell it today you would earn a total of 1,400 from holding ESSILORLUXOTTICA 12ON or generate 14.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Carmat SA vs. ESSILORLUXOTTICA 12ON
Performance |
Timeline |
Carmat SA |
ESSILORLUXOTTICA 12ON |
Carmat SA and ESSILORLUXOTTICA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carmat SA and ESSILORLUXOTTICA
The main advantage of trading using opposite Carmat SA and ESSILORLUXOTTICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA 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.Carmat SA vs. ESSILORLUXOTTICA 12ON | Carmat SA vs. Intuitive Surgical | Carmat SA vs. EssilorLuxottica Socit anonyme | Carmat SA vs. Resmed Inc DRC |
ESSILORLUXOTTICA vs. Intuitive Surgical | ESSILORLUXOTTICA vs. EssilorLuxottica Socit anonyme | ESSILORLUXOTTICA vs. Resmed Inc DRC | ESSILORLUXOTTICA vs. ResMed Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |