Correlation Between Kimberly Clark and ELF Beauty
Can any of the company-specific risk be diversified away by investing in both Kimberly Clark and ELF Beauty 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 Kimberly Clark and ELF Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimberly Clark and ELF Beauty, you can compare the effects of market volatilities on Kimberly Clark and ELF Beauty 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 Kimberly Clark with a short position of ELF Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimberly Clark and ELF Beauty.
Diversification Opportunities for Kimberly Clark and ELF Beauty
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kimberly and ELF is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kimberly Clark and ELF Beauty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELF Beauty and Kimberly Clark 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 Kimberly Clark are associated (or correlated) with ELF Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELF Beauty has no effect on the direction of Kimberly Clark i.e., Kimberly Clark and ELF Beauty go up and down completely randomly.
Pair Corralation between Kimberly Clark and ELF Beauty
Considering the 90-day investment horizon Kimberly Clark is expected to generate 4.9 times less return on investment than ELF Beauty. But when comparing it to its historical volatility, Kimberly Clark is 3.45 times less risky than ELF Beauty. It trades about 0.03 of its potential returns per unit of risk. ELF Beauty is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,958 in ELF Beauty on November 1, 2024 and sell it today you would earn a total of 3,747 from holding ELF Beauty or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimberly Clark vs. ELF Beauty
Performance |
| Timeline |
| Kimberly Clark |
| ELF Beauty |
Kimberly Clark and ELF Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimberly Clark and ELF Beauty
The main advantage of trading using opposite Kimberly Clark and ELF Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimberly Clark position performs unexpectedly, ELF Beauty 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 ELF Beauty will offset losses from the drop in ELF Beauty's long position.| Kimberly Clark vs. Colgate Palmolive | Kimberly Clark vs. Church Dwight | Kimberly Clark vs. Unilever PLC ADR | Kimberly Clark vs. Procter Gamble |
| ELF Beauty vs. Procter Gamble | ELF Beauty vs. Colgate Palmolive | ELF Beauty vs. Coty Inc | ELF Beauty vs. Kenvue 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |