This module allows you to analyze existing cross correlation between Tiffany Co and The Este Lauder Companies. You can compare the effects of market volatilities on Tiffany 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 Tiffany with a short position of Este Lauder. See also your portfolio center. Please also check ongoing floating volatility patterns of Tiffany and Este Lauder.
Considering 30-days investment horizon, Tiffany Co is expected to generate 0.46 times more return on investment than Este Lauder. However, Tiffany Co is 2.16 times less risky than Este Lauder. It trades about -0.27 of its potential returns per unit of risk. The Este Lauder Companies is currently generating about -0.34 per unit of risk. If you would invest 13,789 in Tiffany Co on June 16, 2018 and sell it today you would lose (518.00) from holding Tiffany Co or give up 3.76% of portfolio value over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Tiffany Co and The Este Lauder Companies Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on The Este Lauder and Tiffany 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 Tiffany Co 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 The Este Lauder has no effect on the direction of Tiffany i.e. Tiffany and Este Lauder go up and down completely randomly.
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