Correlation Between Stephan and LOréal SA
Can any of the company-specific risk be diversified away by investing in both Stephan and LOréal SA 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 Stephan and LOréal SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Stephan Co and LOral SA, you can compare the effects of market volatilities on Stephan and LOréal SA 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 Stephan with a short position of LOréal SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stephan and LOréal SA.
Diversification Opportunities for Stephan and LOréal SA
Very good diversification
The 3 months correlation between Stephan and LOréal is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding The Stephan Co and LOral SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOréal SA and Stephan 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 The Stephan Co are associated (or correlated) with LOréal SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOréal SA has no effect on the direction of Stephan i.e., Stephan and LOréal SA go up and down completely randomly.
Pair Corralation between Stephan and LOréal SA
If you would invest 164.00 in The Stephan Co on August 24, 2024 and sell it today you would earn a total of 0.00 from holding The Stephan Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
The Stephan Co vs. LOral SA
Performance |
| Timeline |
| The Stephan |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LOréal SA |
Stephan and LOréal SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stephan and LOréal SA
The main advantage of trading using opposite Stephan and LOréal SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stephan position performs unexpectedly, LOréal SA 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 LOréal SA will offset losses from the drop in LOréal SA's long position.| Stephan vs. LOreal Co ADR | Stephan vs. Unilever PLC | Stephan vs. Estee Lauder Companies | Stephan vs. Church Dwight |
| LOréal SA vs. Inter Parfums | LOréal SA vs. European Wax Center | LOréal SA vs. Estee Lauder Companies | LOréal SA vs. Reckitt Benckiser Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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