Correlation Between Coty and Unilever PLC
Can any of the company-specific risk be diversified away by investing in both Coty and Unilever PLC 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 Coty and Unilever PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coty Inc and Unilever PLC, you can compare the effects of market volatilities on Coty and Unilever PLC 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 Coty with a short position of Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and Unilever PLC.
Diversification Opportunities for Coty and Unilever PLC
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coty and Unilever is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever PLC and Coty 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 Coty Inc are associated (or correlated) with Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of Coty i.e., Coty and Unilever PLC go up and down completely randomly.
Pair Corralation between Coty and Unilever PLC
Assuming the 90 days trading horizon Coty Inc is expected to generate 1.5 times more return on investment than Unilever PLC. However, Coty is 1.5 times more volatile than Unilever PLC. It trades about 0.19 of its potential returns per unit of risk. Unilever PLC is currently generating about 0.16 per unit of risk. If you would invest 2,116 in Coty Inc on September 12, 2024 and sell it today you would earn a total of 226.00 from holding Coty Inc or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coty Inc vs. Unilever PLC
Performance |
| Timeline |
| Coty Inc |
| Unilever PLC |
Coty and Unilever PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and Unilever PLC
The main advantage of trading using opposite Coty and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty position performs unexpectedly, Unilever PLC 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.| Coty vs. Cognizant Technology Solutions | Coty vs. United States Steel | Coty vs. Electronic Arts | Coty vs. Unity Software |
| Unilever PLC vs. Charter Communications | Unilever PLC vs. salesforce inc | Unilever PLC vs. Spotify Technology SA | Unilever PLC vs. Tres Tentos Agroindustrial |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |