Correlation Between Este Lauder and Wiener Privatbank

Can any of the company-specific risk be diversified away by investing in both Este Lauder and Wiener Privatbank 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 Wiener Privatbank 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 Wiener Privatbank SE, you can compare the effects of market volatilities on Este Lauder and Wiener Privatbank 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 Wiener Privatbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Este Lauder and Wiener Privatbank.

Diversification Opportunities for Este Lauder and Wiener Privatbank

0.44

Correlation Coefficient

Este Lauder  Wiener Privatbank

Very weak diversification

The 3 months correlation between Este and Wiener is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder and Wiener Privatbank SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wiener Privatbank 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 Wiener Privatbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wiener Privatbank has no effect on the direction of Este Lauder i.e., Este Lauder and Wiener Privatbank go up and down completely randomly.

Pair Corralation between Este Lauder and Wiener Privatbank

Assuming the 90 days trading horizon The Este Lauder is expected to generate 10.17 times more return on investment than Wiener Privatbank. However, Este Lauder is 10.17 times more volatile than Wiener Privatbank SE. It trades about 0.01 of its potential returns per unit of risk. Wiener Privatbank SE is currently generating about -0.25 per unit of risk. If you would invest  7,861  in The Este Lauder on September 17, 2024 and sell it today you would lose (201.00) from holding The Este Lauder or give up 2.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

The Este Lauder  vs.  Wiener Privatbank SE

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.

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.

Pair Trading with Este Lauder and Wiener Privatbank

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

The idea behind The Este Lauder and Wiener Privatbank SE 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..