Correlation Between Unilever PLC and Nu Skin
Can any of the company-specific risk be diversified away by investing in both Unilever PLC and Nu Skin 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 Unilever PLC and Nu Skin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever PLC ADR and Nu Skin Enterprises, you can compare the effects of market volatilities on Unilever PLC and Nu Skin 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 Unilever PLC with a short position of Nu Skin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever PLC and Nu Skin.
Diversification Opportunities for Unilever PLC and Nu Skin
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Unilever and NUS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Unilever PLC ADR and Nu Skin Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Skin Enterprises and Unilever PLC 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 Unilever PLC ADR are associated (or correlated) with Nu Skin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Skin Enterprises has no effect on the direction of Unilever PLC i.e., Unilever PLC and Nu Skin go up and down completely randomly.
Pair Corralation between Unilever PLC and Nu Skin
Allowing for the 90-day total investment horizon Unilever PLC ADR is expected to generate 0.31 times more return on investment than Nu Skin. However, Unilever PLC ADR is 3.22 times less risky than Nu Skin. It trades about 0.12 of its potential returns per unit of risk. Nu Skin Enterprises is currently generating about -0.09 per unit of risk. 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 |
Unilever PLC ADR vs. Nu Skin Enterprises
Performance |
| Timeline |
| Unilever PLC ADR |
| Nu Skin Enterprises |
Unilever PLC and Nu Skin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever PLC and Nu Skin
The main advantage of trading using opposite Unilever PLC and Nu Skin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever PLC position performs unexpectedly, Nu Skin 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 Nu Skin will offset losses from the drop in Nu Skin's long position.| Unilever PLC vs. Highway Holdings Limited | Unilever PLC vs. QCR Holdings | Unilever PLC vs. Partner Communications | Unilever PLC vs. Acumen Pharmaceuticals |
| Nu Skin vs. Herbalife Nutrition | Nu Skin vs. USANA Health Sciences | Nu Skin vs. Inter Parfums | Nu Skin vs. Flowers Foods |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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