Correlation Between Estee Lauder and Sendas Distribuidora
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Sendas Distribuidora 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 Sendas Distribuidora 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 Sendas Distribuidora SA, you can compare the effects of market volatilities on Estee Lauder and Sendas Distribuidora 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 Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Sendas Distribuidora.
Diversification Opportunities for Estee Lauder and Sendas Distribuidora
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Estee and Sendas is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora 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 Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Estee Lauder i.e., Estee Lauder and Sendas Distribuidora go up and down completely randomly.
Pair Corralation between Estee Lauder and Sendas Distribuidora
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Sendas Distribuidora. In addition to that, Estee Lauder is 4.96 times more volatile than Sendas Distribuidora SA. It trades about -0.14 of its total potential returns per unit of risk. Sendas Distribuidora SA is currently generating about -0.58 per unit of volatility. If you would invest 467.00 in Sendas Distribuidora SA on November 9, 2024 and sell it today you would lose (7.00) from holding Sendas Distribuidora SA or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 15.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Sendas Distribuidora SA
Performance |
| Timeline |
| Estee Lauder Companies |
| Sendas Distribuidora |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Estee Lauder and Sendas Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Sendas Distribuidora
The main advantage of trading using opposite Estee Lauder and Sendas Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Sendas Distribuidora 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 Sendas Distribuidora will offset losses from the drop in Sendas Distribuidora's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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