Correlation Between Estee Lauder and Newell
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By analyzing existing cross correlation between Estee Lauder Companies and Newell Brands 42, you can compare the effects of market volatilities on Estee Lauder and Newell 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 Newell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Newell.
Diversification Opportunities for Estee Lauder and Newell
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Estee and Newell is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Newell Brands 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands 42 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 Newell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands 42 has no effect on the direction of Estee Lauder i.e., Estee Lauder and Newell go up and down completely randomly.
Pair Corralation between Estee Lauder and Newell
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Newell. In addition to that, Estee Lauder is 2.98 times more volatile than Newell Brands 42. It trades about -0.07 of its total potential returns per unit of risk. Newell Brands 42 is currently generating about -0.09 per unit of volatility. If you would invest 10,024 in Newell Brands 42 on September 13, 2024 and sell it today you would lose (512.00) from holding Newell Brands 42 or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.02% |
| Values | Daily Returns |
Estee Lauder Companies vs. Newell Brands 42
Performance |
| Timeline |
| Estee Lauder Companies |
| Newell Brands 42 |
Estee Lauder and Newell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Newell
The main advantage of trading using opposite Estee Lauder and Newell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Newell 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 Newell will offset losses from the drop in Newell's long position.| Estee Lauder vs. Edgewell Personal Care | Estee Lauder vs. Nu Skin Enterprises | Estee Lauder vs. Helen of Troy | Estee Lauder vs. European Wax Center |
| Newell vs. Skechers USA | Newell vs. Estee Lauder Companies | Newell vs. Naked Wines plc | Newell vs. PepsiCo |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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