Correlation Between ESSILORLUXOTTICA and Advanced Medical

Can any of the company-specific risk be diversified away by investing in both ESSILORLUXOTTICA and Advanced Medical 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 ESSILORLUXOTTICA and Advanced Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ESSILORLUXOTTICA 12ON and Advanced Medical Solutions, you can compare the effects of market volatilities on ESSILORLUXOTTICA and Advanced Medical 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 ESSILORLUXOTTICA with a short position of Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSILORLUXOTTICA and Advanced Medical.

Diversification Opportunities for ESSILORLUXOTTICA and Advanced Medical

-0.36

Correlation Coefficient

ESSILORLUXOTTICA  Advanced Medical

Very good diversification

The 3 months correlation between ESSILORLUXOTTICA and Advanced is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ESSILORLUXOTTICA 12ON and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol and ESSILORLUXOTTICA 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 ESSILORLUXOTTICA 12ON are associated (or correlated) with Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of ESSILORLUXOTTICA i.e., ESSILORLUXOTTICA and Advanced Medical go up and down completely randomly.

Pair Corralation between ESSILORLUXOTTICA and Advanced Medical

Assuming the 90 days trading horizon ESSILORLUXOTTICA is expected to generate 5.01 times less return on investment than Advanced Medical. But when comparing it to its historical volatility, ESSILORLUXOTTICA 12ON is 1.02 times less risky than Advanced Medical. It trades about 0.02 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  210.00  in Advanced Medical Solutions on April 21, 2025 and sell it today you would earn a total of  24.00  from holding Advanced Medical Solutions or generate 11.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ESSILORLUXOTTICA 12ON  vs.  Advanced Medical Solutions

ESSILORLUXOTTICA 12ON

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ESSILORLUXOTTICA 12ON are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, ESSILORLUXOTTICA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Advanced Medical Sol

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Medical Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Advanced Medical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with ESSILORLUXOTTICA and Advanced Medical

The main advantage of trading using opposite ESSILORLUXOTTICA and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESSILORLUXOTTICA position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.

The idea behind ESSILORLUXOTTICA 12ON and Advanced Medical Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.