Correlation Between Henkel AG and Estee Lauder
Can any of the company-specific risk be diversified away by investing in both Henkel AG 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 Henkel AG and Estee Lauder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henkel AG Co and Estee Lauder Companies, you can compare the effects of market volatilities on Henkel AG 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 Henkel AG with a short position of Estee Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henkel AG and Estee Lauder.
Diversification Opportunities for Henkel AG and Estee Lauder
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Henkel and Estee is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Henkel AG Co 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 Henkel AG 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 Henkel AG Co 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 Henkel AG i.e., Henkel AG and Estee Lauder go up and down completely randomly.
Pair Corralation between Henkel AG and Estee Lauder
Assuming the 90 days horizon Henkel AG Co is expected to generate 0.45 times more return on investment than Estee Lauder. However, Henkel AG Co is 2.22 times less risky than Estee Lauder. It trades about 0.47 of its potential returns per unit of risk. Estee Lauder Companies is currently generating about 0.11 per unit of risk. If you would invest 1,907 in Henkel AG Co on December 11, 2024 and sell it today you would earn a total of 213.00 from holding Henkel AG Co or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Henkel AG Co vs. Estee Lauder Companies
Performance |
| Timeline |
| Henkel AG |
| Estee Lauder Companies |
Henkel AG and Estee Lauder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henkel AG and Estee Lauder
The main advantage of trading using opposite Henkel AG and Estee Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henkel AG 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.| Henkel AG vs. Essity AB | Henkel AG vs. Hengan International Group | Henkel AG vs. LOral SA | Henkel AG vs. Beiersdorf AG ADR |
| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |