Correlation Between Colgate Palmolive and Unilever Indonesia
Can any of the company-specific risk be diversified away by investing in both Colgate Palmolive and Unilever Indonesia 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 Unilever Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colgate Palmolive and Unilever Indonesia Tbk, you can compare the effects of market volatilities on Colgate Palmolive and Unilever Indonesia 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 Unilever Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colgate Palmolive and Unilever Indonesia.
Diversification Opportunities for Colgate Palmolive and Unilever Indonesia
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Colgate and Unilever is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Colgate Palmolive and Unilever Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever Indonesia Tbk 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 Unilever Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Indonesia Tbk has no effect on the direction of Colgate Palmolive i.e., Colgate Palmolive and Unilever Indonesia go up and down completely randomly.
Pair Corralation between Colgate Palmolive and Unilever Indonesia
Allowing for the 90-day total investment horizon Colgate Palmolive is expected to under-perform the Unilever Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, Colgate Palmolive is 3.36 times less risky than Unilever Indonesia. The stock trades about -0.11 of its potential returns per unit of risk. The Unilever Indonesia Tbk is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 210.00 in Unilever Indonesia Tbk on August 21, 2025 and sell it today you would earn a total of 92.00 from holding Unilever Indonesia Tbk or generate 43.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Colgate Palmolive vs. Unilever Indonesia Tbk
Performance |
| Timeline |
| Colgate Palmolive |
| Unilever Indonesia Tbk |
Colgate Palmolive and Unilever Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colgate Palmolive and Unilever Indonesia
The main advantage of trading using opposite Colgate Palmolive and Unilever Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colgate Palmolive position performs unexpectedly, Unilever Indonesia 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 Unilever Indonesia will offset losses from the drop in Unilever Indonesia's long position.| Colgate Palmolive vs. Diageo PLC ADR | Colgate Palmolive vs. Kenvue Inc | Colgate Palmolive vs. Kimberly Clark | Colgate Palmolive vs. Monster Beverage Corp |
| Unilever Indonesia vs. Kimberly Clark de Mexico | Unilever Indonesia vs. Socit BIC SA | Unilever Indonesia vs. Emmi AG | Unilever Indonesia vs. Meiji Holdings Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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