Correlation Between Estee Lauder and Summa Silver
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Summa Silver 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 Summa Silver 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 Summa Silver Corp, you can compare the effects of market volatilities on Estee Lauder and Summa Silver 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 Summa Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Summa Silver.
Diversification Opportunities for Estee Lauder and Summa Silver
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Estee and Summa is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Summa Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summa Silver 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 Summa Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summa Silver Corp has no effect on the direction of Estee Lauder i.e., Estee Lauder and Summa Silver go up and down completely randomly.
Pair Corralation between Estee Lauder and Summa Silver
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to generate 1.41 times more return on investment than Summa Silver. However, Estee Lauder is 1.41 times more volatile than Summa Silver Corp. It trades about -0.15 of its potential returns per unit of risk. Summa Silver Corp is currently generating about -0.36 per unit of risk. If you would invest 8,872 in Estee Lauder Companies on August 28, 2024 and sell it today you would lose (1,575) from holding Estee Lauder Companies or give up 17.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Summa Silver Corp
Performance |
| Timeline |
| Estee Lauder Companies |
| Summa Silver Corp |
Estee Lauder and Summa Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Summa Silver
The main advantage of trading using opposite Estee Lauder and Summa Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Summa Silver 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 Summa Silver will offset losses from the drop in Summa Silver's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Kimberly Clark |
| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |