Correlation Between Este Lauder and Semperit Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Este Lauder and Semperit Aktiengesellscha 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 Semperit Aktiengesellscha 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 Semperit Aktiengesellschaft Holding, you can compare the effects of market volatilities on Este Lauder and Semperit Aktiengesellscha 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 Semperit Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Este Lauder and Semperit Aktiengesellscha.

Diversification Opportunities for Este Lauder and Semperit Aktiengesellscha

-0.38

Correlation Coefficient

Este Lauder  Semperit Aktiengesellscha

Very good diversification

The 3 months correlation between Este and Semperit is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder and Semperit Aktiengesellschaft Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semperit Aktiengesellscha 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 Semperit Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semperit Aktiengesellscha has no effect on the direction of Este Lauder i.e., Este Lauder and Semperit Aktiengesellscha go up and down completely randomly.

Pair Corralation between Este Lauder and Semperit Aktiengesellscha

Assuming the 90 days trading horizon The Este Lauder is expected to under-perform the Semperit Aktiengesellscha. In addition to that, Este Lauder is 2.03 times more volatile than Semperit Aktiengesellschaft Holding. It trades about -0.05 of its total potential returns per unit of risk. Semperit Aktiengesellschaft Holding is currently generating about 0.24 per unit of volatility. If you would invest  1,184  in Semperit Aktiengesellschaft Holding on December 30, 2024 and sell it today you would earn a total of  316.00  from holding Semperit Aktiengesellschaft Holding or generate 26.69% 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.  Semperit Aktiengesellschaft Ho

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 latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Semperit Aktiengesellscha

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, Semperit Aktiengesellscha demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Este Lauder and Semperit Aktiengesellscha

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

The idea behind The Este Lauder and Semperit Aktiengesellschaft Holding 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.