Correlation Between KMBB34 and Este Lauder
Can any of the company-specific risk be diversified away by investing in both KMBB34 and Este 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 KMBB34 and Este Lauder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KMBB34 and The Este Lauder, you can compare the effects of market volatilities on KMBB34 and Este 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 KMBB34 with a short position of Este Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMBB34 and Este Lauder.
Diversification Opportunities for KMBB34 and Este Lauder
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between KMBB34 and Este is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KMBB34 and The Este Lauder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Este Lauder and KMBB34 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 KMBB34 are associated (or correlated) with Este Lauder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Este Lauder has no effect on the direction of KMBB34 i.e., KMBB34 and Este Lauder go up and down completely randomly.
Pair Corralation between KMBB34 and Este Lauder
Assuming the 90 days trading horizon KMBB34 is expected to generate 0.4 times more return on investment than Este Lauder. However, KMBB34 is 2.5 times less risky than Este Lauder. It trades about 0.1 of its potential returns per unit of risk. The Este Lauder is currently generating about -0.03 per unit of risk. If you would invest 58,178 in KMBB34 on September 26, 2024 and sell it today you would earn a total of 24,142 from holding KMBB34 or generate 41.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 96.12% |
Values | Daily Returns |
KMBB34 vs. The Este Lauder
Performance |
Timeline |
KMBB34 |
Este Lauder |
KMBB34 and Este Lauder Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KMBB34 and Este Lauder
The main advantage of trading using opposite KMBB34 and Este Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMBB34 position performs unexpectedly, Este 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 Este Lauder will offset losses from the drop in Este Lauder's long position.KMBB34 vs. The Procter Gamble | KMBB34 vs. Unilever PLC | KMBB34 vs. The Este Lauder | KMBB34 vs. Colgate Palmolive |
Este Lauder vs. The Procter Gamble | Este Lauder vs. Unilever PLC | Este Lauder vs. Colgate Palmolive | Este Lauder vs. KMBB34 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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