Correlation Between Nu Skin and Coty
Can any of the company-specific risk be diversified away by investing in both Nu Skin and Coty 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 Nu Skin and Coty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Skin Enterprises and Coty Inc, you can compare the effects of market volatilities on Nu Skin and Coty 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 Nu Skin with a short position of Coty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Skin and Coty.
Diversification Opportunities for Nu Skin and Coty
Weak diversification
The 3 months correlation between NUS and Coty is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nu Skin Enterprises and Coty Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coty Inc and Nu Skin 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 Nu Skin Enterprises are associated (or correlated) with Coty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coty Inc has no effect on the direction of Nu Skin i.e., Nu Skin and Coty go up and down completely randomly.
Pair Corralation between Nu Skin and Coty
Considering the 90-day investment horizon Nu Skin Enterprises is expected to generate 1.61 times more return on investment than Coty. However, Nu Skin is 1.61 times more volatile than Coty Inc. It trades about 0.31 of its potential returns per unit of risk. Coty Inc is currently generating about -0.06 per unit of risk. If you would invest 625.00 in Nu Skin Enterprises on August 31, 2024 and sell it today you would earn a total of 144.00 from holding Nu Skin Enterprises or generate 23.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Skin Enterprises vs. Coty Inc
Performance |
| Timeline |
| Nu Skin Enterprises |
| Coty Inc |
Nu Skin and Coty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Skin and Coty
The main advantage of trading using opposite Nu Skin and Coty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Skin position performs unexpectedly, Coty 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 Coty will offset losses from the drop in Coty's long position.| Nu Skin vs. Herbalife Nutrition | Nu Skin vs. USANA Health Sciences | Nu Skin vs. Inter Parfums | Nu Skin vs. Flowers Foods |
| Coty vs. Aquagold International | Coty vs. Morningstar Unconstrained Allocation | Coty vs. Thrivent High Yield | Coty vs. Via Renewables |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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