Correlation Between Wiener Privatbank and Este Lauder

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

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

Diversification Opportunities for Wiener Privatbank and Este Lauder

0.45

Correlation Coefficient

Wiener Privatbank  Este Lauder

Very weak diversification

The 3 months correlation between Wiener and Este is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Wiener Privatbank SE and The Este Lauder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Este Lauder and Wiener Privatbank 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 Wiener Privatbank SE 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 Wiener Privatbank i.e., Wiener Privatbank and Este Lauder go up and down completely randomly.

Pair Corralation between Wiener Privatbank and Este Lauder

Assuming the 90 days trading horizon Wiener Privatbank SE is expected to under-perform the Este Lauder. But the stock apears to be less risky and, when comparing its historical volatility, Wiener Privatbank SE is 7.41 times less risky than Este Lauder. The stock trades about -0.08 of its potential returns per unit of risk. The The Este Lauder is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,583  in The Este Lauder on September 12, 2024 and sell it today you would earn a total of  237.00  from holding The Este Lauder or generate 3.13% return on investment over 90 days.

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

Wiener Privatbank SE  vs.  The Este Lauder

Wiener Privatbank

Risk-Adjusted Performance

0 of 100

Very Weak

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

Este Lauder

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Este Lauder are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Este Lauder may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Wiener Privatbank and Este Lauder

The main advantage of trading using opposite Wiener Privatbank and Este Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wiener Privatbank 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.

The idea behind Wiener Privatbank SE and The Este Lauder 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.