Correlation Between AT S and Este Lauder
Can any of the company-specific risk be diversified away by investing in both AT S and Este Lauder 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 AT S and Este Lauder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AT S Austria and The Este Lauder, you can compare the effects of market volatilities on AT S and Este Lauder 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 AT S with a short position of Este Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of AT S and Este Lauder.
Diversification Opportunities for AT S and Este Lauder
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATS and Este is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding AT S Austria and The Este Lauder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Este Lauder and AT S 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 AT S Austria are associated (or correlated) with Este Lauder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Este Lauder has no effect on the direction of AT S i.e., AT S and Este Lauder go up and down completely randomly.
Pair Corralation between AT S and Este Lauder
Assuming the 90 days trading horizon AT S Austria is expected to under-perform the Este Lauder. But the stock apears to be less risky and, when comparing its historical volatility, AT S Austria is 1.38 times less risky than Este Lauder. The stock trades about -0.26 of its potential returns per unit of risk. The The Este Lauder is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 8,100 in The Este Lauder on August 25, 2024 and sell it today you would lose (1,460) from holding The Este Lauder or give up 18.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AT S Austria vs. The Este Lauder
Performance |
| Timeline |
| AT S Austria |
| Este Lauder |
AT S and Este Lauder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AT S and Este Lauder
The main advantage of trading using opposite AT S and Este Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AT S position performs unexpectedly, Este Lauder 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 Este Lauder will offset losses from the drop in Este Lauder's long position.| AT S vs. Voestalpine AG | AT S vs. Lenzing Aktiengesellschaft | AT S vs. Andritz AG | AT S vs. OMV Aktiengesellschaft |
| Este Lauder vs. Unilever PLC | Este Lauder vs. RATH Aktiengesellschaft | Este Lauder vs. AT S Austria | Este Lauder vs. BAWAG Group AG |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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