Correlation Between Estee Lauder and Aquagold International
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Aquagold International 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 Estee Lauder and Aquagold International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Estee Lauder Companies and Aquagold International, you can compare the effects of market volatilities on Estee Lauder and Aquagold International 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 Estee Lauder with a short position of Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Aquagold International.
Diversification Opportunities for Estee Lauder and Aquagold International
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Estee and Aquagold is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Estee Lauder 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 Estee Lauder Companies are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Estee Lauder i.e., Estee Lauder and Aquagold International go up and down completely randomly.
Pair Corralation between Estee Lauder and Aquagold International
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Aquagold International. But the stock apears to be less risky and, when comparing its historical volatility, Estee Lauder Companies is 19.01 times less risky than Aquagold International. The stock trades about -0.08 of its potential returns per unit of risk. The Aquagold International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Aquagold International on October 9, 2024 and sell it today you would lose (16.96) from holding Aquagold International or give up 99.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Aquagold International
Performance |
| Timeline |
| Estee Lauder Companies |
| Aquagold International |
Estee Lauder and Aquagold International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Aquagold International
The main advantage of trading using opposite Estee Lauder and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |