Correlation Between Estee Lauder and Mid Atlantic
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Mid Atlantic 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 Mid Atlantic 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 Mid Atlantic Home Health, you can compare the effects of market volatilities on Estee Lauder and Mid Atlantic 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 Mid Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Mid Atlantic.
Diversification Opportunities for Estee Lauder and Mid Atlantic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Estee and Mid is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Mid Atlantic Home Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Atlantic Home 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 Mid Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Atlantic Home has no effect on the direction of Estee Lauder i.e., Estee Lauder and Mid Atlantic go up and down completely randomly.
Pair Corralation between Estee Lauder and Mid Atlantic
If you would invest 0.01 in Mid Atlantic Home Health on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Mid Atlantic Home Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Mid Atlantic Home Health
Performance |
| Timeline |
| Estee Lauder Companies |
| Mid Atlantic Home |
Estee Lauder and Mid Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Mid Atlantic
The main advantage of trading using opposite Estee Lauder and Mid Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Mid Atlantic 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 Mid Atlantic will offset losses from the drop in Mid Atlantic's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Mid Atlantic vs. Pennant Group | Mid Atlantic vs. Encompass Health Corp | Mid Atlantic vs. Enhabit | Mid Atlantic vs. Concord Medical Services |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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