Correlation Between Nu Skin and Unilever PLC
Can any of the company-specific risk be diversified away by investing in both Nu Skin and Unilever PLC 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 Unilever PLC 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 Unilever PLC ADR, you can compare the effects of market volatilities on Nu Skin and Unilever PLC 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 Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Skin and Unilever PLC.
Diversification Opportunities for Nu Skin and Unilever PLC
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NUS and Unilever is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Nu Skin Enterprises and Unilever PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever PLC ADR 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 Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC ADR has no effect on the direction of Nu Skin i.e., Nu Skin and Unilever PLC go up and down completely randomly.
Pair Corralation between Nu Skin and Unilever PLC
Considering the 90-day investment horizon Nu Skin Enterprises is expected to under-perform the Unilever PLC. In addition to that, Nu Skin is 3.22 times more volatile than Unilever PLC ADR. It trades about -0.09 of its total potential returns per unit of risk. Unilever PLC ADR is currently generating about 0.12 per unit of volatility. If you would invest 5,090 in Unilever PLC ADR on September 3, 2024 and sell it today you would earn a total of 894.00 from holding Unilever PLC ADR or generate 17.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Skin Enterprises vs. Unilever PLC ADR
Performance |
| Timeline |
| Nu Skin Enterprises |
| Unilever PLC ADR |
Nu Skin and Unilever PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Skin and Unilever PLC
The main advantage of trading using opposite Nu Skin and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Skin position performs unexpectedly, Unilever PLC 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.| Nu Skin vs. Herbalife Nutrition | Nu Skin vs. USANA Health Sciences | Nu Skin vs. Inter Parfums | Nu Skin vs. Flowers Foods |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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