Correlation Between Estee Lauder and Hillman Solutions
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Hillman Solutions 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 Hillman Solutions 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 Hillman Solutions Corp, you can compare the effects of market volatilities on Estee Lauder and Hillman Solutions 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 Hillman Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Hillman Solutions.
Diversification Opportunities for Estee Lauder and Hillman Solutions
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Estee and Hillman is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Hillman Solutions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillman Solutions Corp 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 Hillman Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillman Solutions Corp has no effect on the direction of Estee Lauder i.e., Estee Lauder and Hillman Solutions go up and down completely randomly.
Pair Corralation between Estee Lauder and Hillman Solutions
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Hillman Solutions. In addition to that, Estee Lauder is 1.22 times more volatile than Hillman Solutions Corp. It trades about -0.07 of its total potential returns per unit of risk. Hillman Solutions Corp is currently generating about 0.04 per unit of volatility. If you would invest 838.00 in Hillman Solutions Corp on August 25, 2024 and sell it today you would earn a total of 290.00 from holding Hillman Solutions Corp or generate 34.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Estee Lauder Companies vs. Hillman Solutions Corp
Performance |
| Timeline |
| Estee Lauder Companies |
| Hillman Solutions Corp |
Estee Lauder and Hillman Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Hillman Solutions
The main advantage of trading using opposite Estee Lauder and Hillman Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Hillman Solutions 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 Hillman Solutions will offset losses from the drop in Hillman Solutions' long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Hillman Solutions vs. Kennametal | Hillman Solutions vs. AB SKF | Hillman Solutions vs. Eastern Co | Hillman Solutions vs. Timken Company |
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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