Correlation Between Estee Lauder and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Coupang LLC 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 Coupang LLC 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 Coupang LLC, you can compare the effects of market volatilities on Estee Lauder and Coupang LLC 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 Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Coupang LLC.
Diversification Opportunities for Estee Lauder and Coupang LLC
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Estee and Coupang is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC 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 Coupang LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang LLC has no effect on the direction of Estee Lauder i.e., Estee Lauder and Coupang LLC go up and down completely randomly.
Pair Corralation between Estee Lauder and Coupang LLC
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Coupang LLC. In addition to that, Estee Lauder is 1.27 times more volatile than Coupang LLC. It trades about -0.13 of its total potential returns per unit of risk. Coupang LLC is currently generating about 0.06 per unit of volatility. If you would invest 2,202 in Coupang LLC on September 2, 2024 and sell it today you would earn a total of 334.00 from holding Coupang LLC or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Coupang LLC
Performance |
| Timeline |
| Estee Lauder Companies |
| Coupang LLC |
Estee Lauder and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Coupang LLC
The main advantage of trading using opposite Estee Lauder and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Coupang LLC 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 Coupang LLC will offset losses from the drop in Coupang LLC's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Coupang LLC vs. PDD Holdings | Coupang LLC vs. JD Inc Adr | Coupang LLC vs. Alibaba Group Holding | Coupang LLC vs. Sea |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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