Correlation Between Este Lauder and Raiffeisen Bank

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

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

Diversification Opportunities for Este Lauder and Raiffeisen Bank

0.08

Correlation Coefficient

Este Lauder  Raiffeisen Bank

Significant diversification

The 3 months correlation between Este and Raiffeisen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder and Raiffeisen Bank International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiffeisen Bank Inte and Este Lauder 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 The Este Lauder are associated (or correlated) with Raiffeisen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiffeisen Bank Inte has no effect on the direction of Este Lauder i.e., Este Lauder and Raiffeisen Bank go up and down completely randomly.

Pair Corralation between Este Lauder and Raiffeisen Bank

Assuming the 90 days trading horizon The Este Lauder is expected to under-perform the Raiffeisen Bank. In addition to that, Este Lauder is 1.33 times more volatile than Raiffeisen Bank International. It trades about -0.07 of its total potential returns per unit of risk. Raiffeisen Bank International is currently generating about 0.04 per unit of volatility. If you would invest  1,535  in Raiffeisen Bank International on September 20, 2024 and sell it today you would earn a total of  452.00  from holding Raiffeisen Bank International or generate 29.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

The Este Lauder  vs.  Raiffeisen Bank International

Este Lauder

Risk-Adjusted Performance

0 of 100

Very Weak

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

Raiffeisen Bank Inte

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Raiffeisen Bank International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Raiffeisen Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Este Lauder and Raiffeisen Bank

The main advantage of trading using opposite Este Lauder and Raiffeisen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Este Lauder position performs unexpectedly, Raiffeisen Bank 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 Raiffeisen Bank will offset losses from the drop in Raiffeisen Bank's long position.

The idea behind The Este Lauder and Raiffeisen Bank International 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.