Correlation Between Este Lauder and Voestalpine
Can any of the company-specific risk be diversified away by investing in both Este Lauder and Voestalpine 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 Voestalpine 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 Voestalpine AG, you can compare the effects of market volatilities on Este Lauder and Voestalpine 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 Voestalpine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Este Lauder and Voestalpine.
Diversification Opportunities for Este Lauder and Voestalpine
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Este and Voestalpine is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder and Voestalpine AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voestalpine 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 Voestalpine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voestalpine AG has no effect on the direction of Este Lauder i.e., Este Lauder and Voestalpine go up and down completely randomly.
Pair Corralation between Este Lauder and Voestalpine
Assuming the 90 days trading horizon The Este Lauder is expected to under-perform the Voestalpine. In addition to that, Este Lauder is 2.53 times more volatile than Voestalpine AG. It trades about -0.09 of its total potential returns per unit of risk. Voestalpine AG is currently generating about -0.19 per unit of volatility. If you would invest 1,972 in Voestalpine AG on August 30, 2024 and sell it today you would lose (176.00) from holding Voestalpine AG or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Este Lauder vs. Voestalpine AG
Performance |
| Timeline |
| Este Lauder |
| Voestalpine AG |
Este Lauder and Voestalpine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Este Lauder and Voestalpine
The main advantage of trading using opposite Este Lauder and Voestalpine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Este Lauder position performs unexpectedly, Voestalpine 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 Voestalpine will offset losses from the drop in Voestalpine's long position.| Este Lauder vs. Unilever PLC | Este Lauder vs. RATH Aktiengesellschaft | Este Lauder vs. AT S Austria | Este Lauder vs. BAWAG Group AG |
| Voestalpine vs. OMV Aktiengesellschaft | Voestalpine vs. Raiffeisen Bank International | Voestalpine vs. Andritz AG | Voestalpine vs. VERBUND AG |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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