Correlation Between Estee Lauder and Kenvue
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Kenvue 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 Kenvue 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 Kenvue Inc, you can compare the effects of market volatilities on Estee Lauder and Kenvue 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 Kenvue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Kenvue.
Diversification Opportunities for Estee Lauder and Kenvue
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Estee and Kenvue is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Kenvue Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenvue Inc 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 Kenvue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenvue Inc has no effect on the direction of Estee Lauder i.e., Estee Lauder and Kenvue go up and down completely randomly.
Pair Corralation between Estee Lauder and Kenvue
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to generate 1.72 times more return on investment than Kenvue. However, Estee Lauder is 1.72 times more volatile than Kenvue Inc. It trades about 0.36 of its potential returns per unit of risk. Kenvue Inc is currently generating about 0.07 per unit of risk. If you would invest 7,498 in Estee Lauder Companies on November 1, 2024 and sell it today you would earn a total of 1,004 from holding Estee Lauder Companies or generate 13.38% 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. Kenvue Inc
Performance |
| Timeline |
| Estee Lauder Companies |
| Kenvue Inc |
Estee Lauder and Kenvue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Kenvue
The main advantage of trading using opposite Estee Lauder and Kenvue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Kenvue 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 Kenvue will offset losses from the drop in Kenvue's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Kenvue vs. Highway Holdings Limited | Kenvue vs. Emerson Electric | Kenvue vs. Topbuild Corp | Kenvue vs. Hurco Companies |
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
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |