Correlation Between Estee Lauder and Onyx Acquisition
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Onyx Acquisition 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 Onyx Acquisition 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 Onyx Acquisition Co, you can compare the effects of market volatilities on Estee Lauder and Onyx Acquisition 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 Onyx Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Onyx Acquisition.
Diversification Opportunities for Estee Lauder and Onyx Acquisition
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Estee and Onyx is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Onyx Acquisition Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onyx Acquisition 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 Onyx Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onyx Acquisition has no effect on the direction of Estee Lauder i.e., Estee Lauder and Onyx Acquisition go up and down completely randomly.
Pair Corralation between Estee Lauder and Onyx Acquisition
If you would invest 7,398 in Estee Lauder Companies on November 2, 2024 and sell it today you would earn a total of 830.00 from holding Estee Lauder Companies or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Estee Lauder Companies vs. Onyx Acquisition Co
Performance |
| Timeline |
| Estee Lauder Companies |
| Onyx Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Estee Lauder and Onyx Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Onyx Acquisition
The main advantage of trading using opposite Estee Lauder and Onyx Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Onyx Acquisition 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 Onyx Acquisition will offset losses from the drop in Onyx Acquisition's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| Onyx Acquisition vs. Canada Goose Holdings | Onyx Acquisition vs. Axalta Coating Systems | Onyx Acquisition vs. Sealed Air | Onyx Acquisition vs. Codexis |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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