Correlation Between Estee Lauder and USANA Health
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and USANA Health 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 USANA Health 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 USANA Health Sciences, you can compare the effects of market volatilities on Estee Lauder and USANA Health 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 USANA Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and USANA Health.
Diversification Opportunities for Estee Lauder and USANA Health
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Estee and USANA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and USANA Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USANA Health Sciences 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 USANA Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USANA Health Sciences has no effect on the direction of Estee Lauder i.e., Estee Lauder and USANA Health go up and down completely randomly.
Pair Corralation between Estee Lauder and USANA Health
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the USANA Health. In addition to that, Estee Lauder is 1.33 times more volatile than USANA Health Sciences. It trades about -0.12 of its total potential returns per unit of risk. USANA Health Sciences is currently generating about -0.05 per unit of volatility. If you would invest 4,673 in USANA Health Sciences on August 28, 2024 and sell it today you would lose (681.00) from holding USANA Health Sciences or give up 14.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. USANA Health Sciences
Performance |
| Timeline |
| Estee Lauder Companies |
| USANA Health Sciences |
Estee Lauder and USANA Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and USANA Health
The main advantage of trading using opposite Estee Lauder and USANA Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, USANA Health 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 USANA Health will offset losses from the drop in USANA Health's long position.| Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Kimberly Clark | Estee Lauder vs. Colgate Palmolive |
| USANA Health vs. J J Snack | USANA Health vs. Lancaster Colony | USANA Health vs. Seneca Foods Corp | USANA Health vs. Seneca Foods Corp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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