Correlation Between Este Lauder and BAWAG Group
Can any of the company-specific risk be diversified away by investing in both Este Lauder and BAWAG Group 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 Este Lauder and BAWAG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Este Lauder and BAWAG Group AG, you can compare the effects of market volatilities on Este Lauder and BAWAG Group 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 Este Lauder with a short position of BAWAG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Este Lauder and BAWAG Group.
Diversification Opportunities for Este Lauder and BAWAG Group
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Este and BAWAG is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder and BAWAG Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAWAG Group AG and Este 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 The Este Lauder are associated (or correlated) with BAWAG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAWAG Group AG has no effect on the direction of Este Lauder i.e., Este Lauder and BAWAG Group go up and down completely randomly.
Pair Corralation between Este Lauder and BAWAG Group
Assuming the 90 days trading horizon The Este Lauder is expected to under-perform the BAWAG Group. In addition to that, Este Lauder is 1.73 times more volatile than BAWAG Group AG. It trades about -0.16 of its total potential returns per unit of risk. BAWAG Group AG is currently generating about 0.09 per unit of volatility. If you would invest 6,145 in BAWAG Group AG on August 23, 2024 and sell it today you would earn a total of 1,135 from holding BAWAG Group AG or generate 18.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
The Este Lauder vs. BAWAG Group AG
Performance |
| Timeline |
| Este Lauder |
| BAWAG Group AG |
Este Lauder and BAWAG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Este Lauder and BAWAG Group
The main advantage of trading using opposite Este Lauder and BAWAG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Este Lauder position performs unexpectedly, BAWAG Group 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 BAWAG Group will offset losses from the drop in BAWAG Group's long position.| Este Lauder vs. UNIQA Insurance Group | Este Lauder vs. CNH Industrial NV | Este Lauder vs. Erste Group Bank | Este Lauder vs. Universal Music Group |
| BAWAG Group vs. Erste Group Bank | BAWAG Group vs. Raiffeisen Bank International | BAWAG Group vs. UNIQA Insurance Group | BAWAG Group vs. OMV Aktiengesellschaft |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |