Correlation Between Estee Lauder and ELEMENT
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By analyzing existing cross correlation between Estee Lauder Companies and ELEMENT SOLUTIONS INC, you can compare the effects of market volatilities on Estee Lauder and ELEMENT 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 ELEMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and ELEMENT.
Diversification Opportunities for Estee Lauder and ELEMENT
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Estee and ELEMENT is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and ELEMENT SOLUTIONS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT SOLUTIONS INC 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 ELEMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT SOLUTIONS INC has no effect on the direction of Estee Lauder i.e., Estee Lauder and ELEMENT go up and down completely randomly.
Pair Corralation between Estee Lauder and ELEMENT
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the ELEMENT. In addition to that, Estee Lauder is 3.66 times more volatile than ELEMENT SOLUTIONS INC. It trades about -0.07 of its total potential returns per unit of risk. ELEMENT SOLUTIONS INC is currently generating about -0.02 per unit of volatility. If you would invest 9,073 in ELEMENT SOLUTIONS INC on September 2, 2024 and sell it today you would lose (365.00) from holding ELEMENT SOLUTIONS INC or give up 4.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.11% |
| Values | Daily Returns |
Estee Lauder Companies vs. ELEMENT SOLUTIONS INC
Performance |
| Timeline |
| Estee Lauder Companies |
| ELEMENT SOLUTIONS INC |
Estee Lauder and ELEMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and ELEMENT
The main advantage of trading using opposite Estee Lauder and ELEMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, ELEMENT 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 ELEMENT will offset losses from the drop in ELEMENT's long position.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
| ELEMENT vs. Skechers USA | ELEMENT vs. Estee Lauder Companies | ELEMENT vs. European Wax Center | ELEMENT vs. Antero Midstream Partners |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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