Correlation Between LOréal SA and Stephan
Can any of the company-specific risk be diversified away by investing in both LOréal SA and Stephan 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 LOréal SA and Stephan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOral SA and The Stephan Co, you can compare the effects of market volatilities on LOréal SA and Stephan 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 LOréal SA with a short position of Stephan. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOréal SA and Stephan.
Diversification Opportunities for LOréal SA and Stephan
Pay attention - limited upside
The 3 months correlation between LOréal and Stephan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LOral SA and The Stephan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Stephan and LOréal SA 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 LOral SA are associated (or correlated) with Stephan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Stephan has no effect on the direction of LOréal SA i.e., LOréal SA and Stephan go up and down completely randomly.
Pair Corralation between LOréal SA and Stephan
If you would invest 35,200 in LOral SA on November 18, 2024 and sell it today you would earn a total of 733.00 from holding LOral SA or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
LOral SA vs. The Stephan Co
Performance |
| Timeline |
| LOréal SA |
| The Stephan |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
LOréal SA and Stephan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOréal SA and Stephan
The main advantage of trading using opposite LOréal SA and Stephan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOréal SA position performs unexpectedly, Stephan 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 Stephan will offset losses from the drop in Stephan's long position.| LOréal SA vs. Inter Parfums | LOréal SA vs. European Wax Center | LOréal SA vs. Estee Lauder Companies | LOréal SA vs. Reckitt Benckiser Group |
| Stephan vs. LOreal Co ADR | Stephan vs. Unilever PLC | Stephan vs. Estee Lauder Companies | Stephan vs. Church Dwight |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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