Correlation Between Unilever PLC and Church Dwight
Can any of the company-specific risk be diversified away by investing in both Unilever PLC and Church Dwight 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 Church Dwight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever PLC and Church Dwight, you can compare the effects of market volatilities on Unilever PLC and Church Dwight 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 Church Dwight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever PLC and Church Dwight.
Diversification Opportunities for Unilever PLC and Church Dwight
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unilever and Church is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Unilever PLC and Church Dwight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Church Dwight 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 are associated (or correlated) with Church Dwight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Church Dwight has no effect on the direction of Unilever PLC i.e., Unilever PLC and Church Dwight go up and down completely randomly.
Pair Corralation between Unilever PLC and Church Dwight
Assuming the 90 days horizon Unilever PLC is expected to under-perform the Church Dwight. In addition to that, Unilever PLC is 2.33 times more volatile than Church Dwight. It trades about -0.08 of its total potential returns per unit of risk. Church Dwight is currently generating about 0.32 per unit of volatility. If you would invest 10,078 in Church Dwight on August 28, 2024 and sell it today you would earn a total of 963.00 from holding Church Dwight or generate 9.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Unilever PLC vs. Church Dwight
Performance |
| Timeline |
| Unilever PLC |
| Church Dwight |
Unilever PLC and Church Dwight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever PLC and Church Dwight
The main advantage of trading using opposite Unilever PLC and Church Dwight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever PLC position performs unexpectedly, Church Dwight 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 Church Dwight will offset losses from the drop in Church Dwight's long position.| Unilever PLC vs. LOreal Co ADR | Unilever PLC vs. Estee Lauder Companies | Unilever PLC vs. Church Dwight | Unilever PLC vs. LOral SA |
| Church Dwight vs. Kimberly Clark | Church Dwight vs. Colgate Palmolive | Church Dwight vs. Unilever PLC ADR | Church Dwight vs. Procter Gamble |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |