Correlation Between Estee Lauder and Pool
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Pool 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 Pool 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 Pool Corporation, you can compare the effects of market volatilities on Estee Lauder and Pool 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 Pool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Pool.
Diversification Opportunities for Estee Lauder and Pool
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Estee and Pool is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Pool Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pool 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 Pool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pool has no effect on the direction of Estee Lauder i.e., Estee Lauder and Pool go up and down completely randomly.
Pair Corralation between Estee Lauder and Pool
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Pool. In addition to that, Estee Lauder is 1.34 times more volatile than Pool Corporation. It trades about -0.13 of its total potential returns per unit of risk. Pool Corporation is currently generating about 0.04 per unit of volatility. If you would invest 35,167 in Pool Corporation on September 2, 2024 and sell it today you would earn a total of 2,542 from holding Pool Corporation or generate 7.23% 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. Pool Corp.
Performance |
| Timeline |
| Estee Lauder Companies |
| Pool |
Estee Lauder and Pool Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Pool
The main advantage of trading using opposite Estee Lauder and Pool positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Pool 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 Pool will offset losses from the drop in Pool's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |