Correlation Between Gold Fields and Estee Lauder
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Estee Lauder 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 Gold Fields and Estee Lauder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Estee Lauder Companies, you can compare the effects of market volatilities on Gold Fields and Estee Lauder 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 Gold Fields with a short position of Estee Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Estee Lauder.
Diversification Opportunities for Gold Fields and Estee Lauder
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gold and Estee is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Estee Lauder Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estee Lauder Companies and Gold Fields 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 Gold Fields Ltd are associated (or correlated) with Estee Lauder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estee Lauder Companies has no effect on the direction of Gold Fields i.e., Gold Fields and Estee Lauder go up and down completely randomly.
Pair Corralation between Gold Fields and Estee Lauder
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 1.1 times more return on investment than Estee Lauder. However, Gold Fields is 1.1 times more volatile than Estee Lauder Companies. It trades about 0.04 of its potential returns per unit of risk. Estee Lauder Companies is currently generating about -0.07 per unit of risk. If you would invest 1,027 in Gold Fields Ltd on August 24, 2024 and sell it today you would earn a total of 497.00 from holding Gold Fields Ltd or generate 48.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Estee Lauder Companies
Performance |
| Timeline |
| Gold Fields |
| Estee Lauder Companies |
Gold Fields and Estee Lauder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Estee Lauder
The main advantage of trading using opposite Gold Fields and Estee Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Estee Lauder 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 Estee Lauder will offset losses from the drop in Estee Lauder's long position.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| Estee Lauder vs. Eshallgo Class A | Estee Lauder vs. Amtech Systems | Estee Lauder vs. Gold Fields Ltd | Estee Lauder vs. Aegean Airlines SA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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