Correlation Between Colgate Palmolive and Realogy Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Colgate Palmolive and Realogy Holdings 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 Colgate Palmolive and Realogy Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colgate Palmolive and Realogy Holdings Corp, you can compare the effects of market volatilities on Colgate Palmolive and Realogy Holdings 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 Colgate Palmolive with a short position of Realogy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colgate Palmolive and Realogy Holdings.

Diversification Opportunities for Colgate Palmolive and Realogy Holdings

-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between Colgate and Realogy is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Colgate-Palmolive and Realogy Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realogy Holdings Corp and Colgate Palmolive 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 Colgate Palmolive are associated (or correlated) with Realogy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realogy Holdings Corp has no effect on the direction of Colgate Palmolive i.e., Colgate Palmolive and Realogy Holdings go up and down completely randomly.

Pair Corralation between Colgate Palmolive and Realogy Holdings

If you would invest  8,641  in Colgate Palmolive on December 29, 2023 and sell it today you would earn a total of  354.00  from holding Colgate Palmolive or generate 4.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

Colgate-Palmolive  vs.  Realogy Holdings Corp

 Performance 
       Timeline  
Colgate-Palmolive 

Risk-Adjusted Performance

21 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Colgate Palmolive are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Colgate Palmolive disclosed solid returns over the last few months and may actually be approaching a breakup point.
Realogy Holdings Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Realogy Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Realogy Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Colgate Palmolive and Realogy Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Colgate Palmolive and Realogy Holdings

The main advantage of trading using opposite Colgate Palmolive and Realogy Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colgate Palmolive position performs unexpectedly, Realogy Holdings 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 Realogy Holdings will offset losses from the drop in Realogy Holdings' long position.
The idea behind Colgate Palmolive and Realogy Holdings Corp 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.
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

Other Complementary Tools

Share Portfolio
Track or share privately all of your investments from the convenience of any device
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.