Correlation Between Este Lauder and Colgate Palmolive
Can any of the company-specific risk be diversified away by investing in both Este Lauder and Colgate Palmolive 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 Colgate Palmolive 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 Colgate Palmolive, you can compare the effects of market volatilities on Este Lauder and Colgate Palmolive 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 Colgate Palmolive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Este Lauder and Colgate Palmolive.
Diversification Opportunities for Este Lauder and Colgate Palmolive
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Este and Colgate is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Este Lauder and Colgate Palmolive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colgate Palmolive 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 Colgate Palmolive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colgate Palmolive has no effect on the direction of Este Lauder i.e., Este Lauder and Colgate Palmolive go up and down completely randomly.
Pair Corralation between Este Lauder and Colgate Palmolive
Assuming the 90 days trading horizon The Este Lauder is expected to generate 1.58 times more return on investment than Colgate Palmolive. However, Este Lauder is 1.58 times more volatile than Colgate Palmolive. It trades about 0.08 of its potential returns per unit of risk. Colgate Palmolive is currently generating about -0.14 per unit of risk. If you would invest 2,018 in The Este Lauder on July 20, 2025 and sell it today you would earn a total of 246.00 from holding The Este Lauder or generate 12.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Este Lauder vs. Colgate Palmolive
Performance |
| Timeline |
| Este Lauder |
| Colgate Palmolive |
Este Lauder and Colgate Palmolive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Este Lauder and Colgate Palmolive
The main advantage of trading using opposite Este Lauder and Colgate Palmolive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Este Lauder position performs unexpectedly, Colgate Palmolive 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 Colgate Palmolive will offset losses from the drop in Colgate Palmolive's long position.| Este Lauder vs. The Hanover Insurance | Este Lauder vs. Extra Space Storage | Este Lauder vs. Deutsche Bank Aktiengesellschaft | Este Lauder vs. The Hartford Financial |
| Colgate Palmolive vs. Omega Healthcare Investors, | Colgate Palmolive vs. Marfrig Global Foods | Colgate Palmolive vs. Teladoc Health | Colgate Palmolive vs. Tyson Foods |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |