Correlation Between ESSILORLUXOTTICA and Sartorius Aktiengesellscha

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

By analyzing existing cross correlation between ESSILORLUXOTTICA 12ON and Sartorius Aktiengesellschaft, you can compare the effects of market volatilities on ESSILORLUXOTTICA and Sartorius Aktiengesellscha 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 Sartorius Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESSILORLUXOTTICA and Sartorius Aktiengesellscha.

Diversification Opportunities for ESSILORLUXOTTICA and Sartorius Aktiengesellscha

0.26

Correlation Coefficient

ESSILORLUXOTTICA  Sartorius Aktiengesellscha

Modest diversification

The 3 months correlation between ESSILORLUXOTTICA and Sartorius is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ESSILORLUXOTTICA 12ON and Sartorius Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Aktiengesellscha 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 Sartorius Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Aktiengesellscha has no effect on the direction of ESSILORLUXOTTICA i.e., ESSILORLUXOTTICA and Sartorius Aktiengesellscha go up and down completely randomly.

Pair Corralation between ESSILORLUXOTTICA and Sartorius Aktiengesellscha

Assuming the 90 days trading horizon ESSILORLUXOTTICA 12ON is expected to generate 1.17 times more return on investment than Sartorius Aktiengesellscha. However, ESSILORLUXOTTICA is 1.17 times more volatile than Sartorius Aktiengesellschaft. It trades about 0.0 of its potential returns per unit of risk. Sartorius Aktiengesellschaft is currently generating about -0.13 per unit of risk. If you would invest  12,192  in ESSILORLUXOTTICA 12ON on April 25, 2025 and sell it today you would lose (192.00) from holding ESSILORLUXOTTICA 12ON or give up 1.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ESSILORLUXOTTICA 12ON  vs.  Sartorius Aktiengesellschaft

ESSILORLUXOTTICA 12ON

Risk-Adjusted Performance

Very Weak

Over the last 90 days ESSILORLUXOTTICA 12ON has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, ESSILORLUXOTTICA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Sartorius Aktiengesellscha

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sartorius Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ESSILORLUXOTTICA and Sartorius Aktiengesellscha

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

The idea behind ESSILORLUXOTTICA 12ON and Sartorius Aktiengesellschaft 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.