Correlation Between Newell Brands and Estee Lauder
Can any of the company-specific risk be diversified away by investing in both Newell Brands 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 Newell Brands and Estee Lauder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newell Brands and Estee Lauder Companies, you can compare the effects of market volatilities on Newell Brands 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 Newell Brands with a short position of Estee Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and Estee Lauder.
Diversification Opportunities for Newell Brands and Estee Lauder
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newell and Estee is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands 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 Newell Brands 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 Newell Brands 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 Newell Brands i.e., Newell Brands and Estee Lauder go up and down completely randomly.
Pair Corralation between Newell Brands and Estee Lauder
Considering the 90-day investment horizon Newell Brands is expected to generate 0.41 times more return on investment than Estee Lauder. However, Newell Brands is 2.41 times less risky than Estee Lauder. It trades about 0.03 of its potential returns per unit of risk. Estee Lauder Companies is currently generating about -0.15 per unit of risk. If you would invest 953.00 in Newell Brands on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Newell Brands or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newell Brands vs. Estee Lauder Companies
Performance |
| Timeline |
| Newell Brands |
| Estee Lauder Companies |
Newell Brands and Estee Lauder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newell Brands and Estee Lauder
The main advantage of trading using opposite Newell Brands and Estee Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands 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.| Newell Brands vs. The Clorox | Newell Brands vs. Colgate Palmolive | Newell Brands vs. Procter Gamble | Newell Brands vs. Unilever PLC ADR |
| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Kimberly Clark |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |