Correlation Between Estee Lauder and Vivic Corp

Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Vivic Corp 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 Estee Lauder and Vivic Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Estee Lauder Companies and Vivic Corp, you can compare the effects of market volatilities on Estee Lauder and Vivic Corp 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 Estee Lauder with a short position of Vivic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Vivic Corp.

Diversification Opportunities for Estee Lauder and Vivic Corp

0.26

Correlation Coefficient

Estee Lauder  Vivic Corp

Modest diversification

The 3 months correlation between Estee and Vivic is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Vivic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivic Corp and Estee Lauder 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 Estee Lauder Companies are associated (or correlated) with Vivic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivic Corp has no effect on the direction of Estee Lauder i.e., Estee Lauder and Vivic Corp go up and down completely randomly.

Pair Corralation between Estee Lauder and Vivic Corp

Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Vivic Corp. But the stock apears to be less risky and, when comparing its historical volatility, Estee Lauder Companies is 5.41 times less risky than Vivic Corp. The stock trades about -0.08 of its potential returns per unit of risk. The Vivic Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Vivic Corp on October 5, 2024 and sell it today you would earn a total of  259.00  from holding Vivic Corp or generate 507.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.78%
Values	Daily Returns

Estee Lauder Companies  vs.  Vivic Corp

Estee Lauder Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Estee Lauder Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Vivic Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vivic Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Vivic Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Estee Lauder and Vivic Corp

The main advantage of trading using opposite Estee Lauder and Vivic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Vivic Corp 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 Vivic Corp will offset losses from the drop in Vivic Corp's long position.

The idea behind Estee Lauder Companies and Vivic Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.