Correlation Between Estee Lauder and SunOpta
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and SunOpta 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 SunOpta 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 SunOpta, you can compare the effects of market volatilities on Estee Lauder and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and SunOpta.
Diversification Opportunities for Estee Lauder and SunOpta
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Estee and SunOpta is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Estee Lauder i.e., Estee Lauder and SunOpta go up and down completely randomly.
Pair Corralation between Estee Lauder and SunOpta
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the SunOpta. In addition to that, Estee Lauder is 1.6 times more volatile than SunOpta. It trades about -0.12 of its total potential returns per unit of risk. SunOpta is currently generating about 0.42 per unit of volatility. If you would invest 586.00 in SunOpta on August 31, 2024 and sell it today you would earn a total of 195.00 from holding SunOpta or generate 33.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. SunOpta
Performance |
| Timeline |
| Estee Lauder Companies |
| SunOpta |
Estee Lauder and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and SunOpta
The main advantage of trading using opposite Estee Lauder and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| SunOpta vs. Central Garden Pet | SunOpta vs. Bridgford Foods | SunOpta vs. Lancaster Colony | SunOpta vs. HUMANA 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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