Correlation Between Este Lauder and Oesterr Post

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

By analyzing existing cross correlation between The Este Lauder and Oesterr Post AG, you can compare the effects of market volatilities on Este Lauder and Oesterr Post 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 Este Lauder with a short position of Oesterr Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Este Lauder and Oesterr Post.

Diversification Opportunities for Este Lauder and Oesterr Post

-0.3

Correlation Coefficient

Este Lauder  Oesterr Post

Very good diversification

The 3 months correlation between Este and Oesterr is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder and Oesterr Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oesterr Post AG and Este 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 The Este Lauder are associated (or correlated) with Oesterr Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oesterr Post AG has no effect on the direction of Este Lauder i.e., Este Lauder and Oesterr Post go up and down completely randomly.

Pair Corralation between Este Lauder and Oesterr Post

Assuming the 90 days trading horizon Este Lauder is expected to generate 54.56 times less return on investment than Oesterr Post. In addition to that, Este Lauder is 4.14 times more volatile than Oesterr Post AG. It trades about 0.0 of its total potential returns per unit of risk. Oesterr Post AG is currently generating about 0.23 per unit of volatility. If you would invest  2,900  in Oesterr Post AG on December 2, 2024 and sell it today you would earn a total of  320.00  from holding Oesterr Post AG or generate 11.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Este Lauder  vs.  Oesterr Post AG

Este Lauder

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Este Lauder has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Este Lauder is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Oesterr Post AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oesterr Post AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Oesterr Post may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Este Lauder and Oesterr Post

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

The idea behind The Este Lauder and Oesterr Post AG 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.