Correlation Between Nu Skin and Estee Lauder
Can any of the company-specific risk be diversified away by investing in both Nu Skin and Estee 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 Nu Skin and Estee Lauder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Skin Enterprises and Estee Lauder Companies, you can compare the effects of market volatilities on Nu Skin and Estee 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 Nu Skin with a short position of Estee Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Skin and Estee Lauder.
Diversification Opportunities for Nu Skin and Estee Lauder
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NUS and Estee is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nu Skin Enterprises and Estee Lauder Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estee Lauder Companies and Nu Skin 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 Nu Skin Enterprises are associated (or correlated) with Estee Lauder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estee Lauder Companies has no effect on the direction of Nu Skin i.e., Nu Skin and Estee Lauder go up and down completely randomly.
Pair Corralation between Nu Skin and Estee Lauder
Considering the 90-day investment horizon Nu Skin is expected to generate 6.69 times less return on investment than Estee Lauder. In addition to that, Nu Skin is 1.09 times more volatile than Estee Lauder Companies. It trades about 0.01 of its total potential returns per unit of risk. Estee Lauder Companies is currently generating about 0.11 per unit of volatility. If you would invest 13,917 in Estee Lauder Companies on January 25, 2024 and sell it today you would earn a total of 781.00 from holding Estee Lauder Companies or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Skin Enterprises vs. Estee Lauder Companies
Performance |
| Timeline |
| Nu Skin Enterprises |
| Estee Lauder Companies |
Nu Skin and Estee Lauder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Skin and Estee Lauder
The main advantage of trading using opposite Nu Skin and Estee Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Skin position performs unexpectedly, Estee 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 Estee Lauder will offset losses from the drop in Estee Lauder's long position.| Nu Skin vs. Herbalife Nutrition | Nu Skin vs. USANA Health Sciences | Nu Skin vs. Inter Parfums | Nu Skin vs. Flowers Foods |
| Estee Lauder vs. Colgate Palmolive | Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. European Wax Center |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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