Correlation Between Where Food and Estee Lauder
Can any of the company-specific risk be diversified away by investing in both Where Food 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 Where Food and Estee Lauder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Where Food Comes and Estee Lauder Companies, you can compare the effects of market volatilities on Where Food 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 Where Food with a short position of Estee Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Where Food and Estee Lauder.
Diversification Opportunities for Where Food and Estee Lauder
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Where and Estee is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes 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 Where Food 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 Where Food Comes 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 Where Food i.e., Where Food and Estee Lauder go up and down completely randomly.
Pair Corralation between Where Food and Estee Lauder
Given the investment horizon of 90 days Where Food Comes is expected to under-perform the Estee Lauder. In addition to that, Where Food is 2.0 times more volatile than Estee Lauder Companies. It trades about -0.08 of its total potential returns per unit of risk. Estee Lauder Companies is currently generating about 0.29 per unit of volatility. If you would invest 7,498 in Estee Lauder Companies on November 1, 2024 and sell it today you would earn a total of 730.00 from holding Estee Lauder Companies or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Where Food Comes vs. Estee Lauder Companies
Performance |
| Timeline |
| Where Food Comes |
| Estee Lauder Companies |
Where Food and Estee Lauder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Where Food and Estee Lauder
The main advantage of trading using opposite Where Food and Estee Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Where Food 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.| Where Food vs. Issuer Direct Corp | Where Food vs. Smith Midland Corp | Where Food vs. Bm Technologies | Where Food vs. 1StdibsCom |
| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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