Correlation Between Estee Lauder and Alkaline Water
Can any of the company-specific risk be diversified away by investing in both Estee Lauder and Alkaline Water 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 Alkaline Water 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 Alkaline Water, you can compare the effects of market volatilities on Estee Lauder and Alkaline Water 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 Alkaline Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Alkaline Water.
Diversification Opportunities for Estee Lauder and Alkaline Water
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Estee and Alkaline is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Alkaline Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkaline Water 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 Alkaline Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkaline Water has no effect on the direction of Estee Lauder i.e., Estee Lauder and Alkaline Water go up and down completely randomly.
Pair Corralation between Estee Lauder and Alkaline Water
If you would invest (100.00) in Alkaline Water on December 7, 2024 and sell it today you would earn a total of 100.00 from holding Alkaline Water or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Estee Lauder Companies vs. Alkaline Water
Performance |
Timeline |
Estee Lauder Companies |
Alkaline Water |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Estee Lauder and Alkaline Water Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Estee Lauder and Alkaline Water
The main advantage of trading using opposite Estee Lauder and Alkaline Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder position performs unexpectedly, Alkaline Water 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 Alkaline Water will offset losses from the drop in Alkaline Water's long position.Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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