Correlation Between Colgate Palmolive and Nu Skin
Can any of the company-specific risk be diversified away by investing in both Colgate Palmolive and Nu Skin 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 Colgate Palmolive and Nu Skin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colgate Palmolive and Nu Skin Enterprises, you can compare the effects of market volatilities on Colgate Palmolive and Nu Skin 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 Colgate Palmolive with a short position of Nu Skin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colgate Palmolive and Nu Skin.
Diversification Opportunities for Colgate Palmolive and Nu Skin
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Colgate and NUS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Colgate Palmolive and Nu Skin Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Skin Enterprises and Colgate Palmolive 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 Colgate Palmolive are associated (or correlated) with Nu Skin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Skin Enterprises has no effect on the direction of Colgate Palmolive i.e., Colgate Palmolive and Nu Skin go up and down completely randomly.
Pair Corralation between Colgate Palmolive and Nu Skin
Allowing for the 90-day total investment horizon Colgate Palmolive is expected to generate 14.84 times less return on investment than Nu Skin. But when comparing it to its historical volatility, Colgate Palmolive is 2.47 times less risky than Nu Skin. It trades about 0.04 of its potential returns per unit of risk. Nu Skin Enterprises is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 629.00 in Nu Skin Enterprises on September 5, 2024 and sell it today you would earn a total of 121.00 from holding Nu Skin Enterprises or generate 19.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Colgate Palmolive vs. Nu Skin Enterprises
Performance |
| Timeline |
| Colgate Palmolive |
| Nu Skin Enterprises |
Colgate Palmolive and Nu Skin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colgate Palmolive and Nu Skin
The main advantage of trading using opposite Colgate Palmolive and Nu Skin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colgate Palmolive position performs unexpectedly, Nu Skin 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 Nu Skin will offset losses from the drop in Nu Skin's long position.| Colgate Palmolive vs. The Clorox | Colgate Palmolive vs. Procter Gamble | Colgate Palmolive vs. Unilever PLC ADR | Colgate Palmolive vs. Church Dwight |
| Nu Skin vs. Herbalife Nutrition | Nu Skin vs. USANA Health Sciences | Nu Skin vs. Inter Parfums | Nu Skin vs. Flowers Foods |
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.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |