Correlation Between Estee Lauder and Bitcoin Depot
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Bitcoin Depot 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 Bitcoin Depot 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 Bitcoin Depot, you can compare the effects of market volatilities on Estee Lauder and Bitcoin Depot 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 Bitcoin Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Bitcoin Depot.
Diversification Opportunities for Estee Lauder and Bitcoin Depot
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Estee and Bitcoin is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Estee Lauder i.e., Estee Lauder and Bitcoin Depot go up and down completely randomly.
Pair Corralation between Estee Lauder and Bitcoin Depot
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Bitcoin Depot. But the stock apears to be less risky and, when comparing its historical volatility, Estee Lauder Companies is 2.49 times less risky than Bitcoin Depot. The stock trades about -0.12 of its potential returns per unit of risk. The Bitcoin Depot is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Bitcoin Depot on August 31, 2024 and sell it today you would earn a total of 47.00 from holding Bitcoin Depot or generate 31.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Bitcoin Depot
Performance |
| Timeline |
| Estee Lauder Companies |
| Bitcoin Depot |
Estee Lauder and Bitcoin Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Bitcoin Depot
The main advantage of trading using opposite Estee Lauder and Bitcoin Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Bitcoin Depot 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 Bitcoin Depot will offset losses from the drop in Bitcoin Depot's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Bitcoin Depot vs. Stepan Company | Bitcoin Depot vs. Jutal Offshore Oil | Bitcoin Depot vs. BW Offshore Limited | Bitcoin Depot vs. Radcom |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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