Correlation Between J J and Estee Lauder

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

By analyzing existing cross correlation between J J Snack and Estee Lauder Companies, you can compare the effects of market volatilities on J J and Estee 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 J J with a short position of Estee Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and Estee Lauder.

Diversification Opportunities for J J and Estee Lauder

0.19

Correlation Coefficient

J J  Estee Lauder

Average diversification

The 3 months correlation between JJSF and Estee is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and Estee Lauder Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estee Lauder Companies and J J 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 J J Snack are associated (or correlated) with Estee Lauder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estee Lauder Companies has no effect on the direction of J J i.e., J J and Estee Lauder go up and down completely randomly.

Pair Corralation between J J and Estee Lauder

Given the investment horizon of 90 days J J is expected to generate 8.63 times less return on investment than Estee Lauder. But when comparing it to its historical volatility, J J Snack is 1.49 times less risky than Estee Lauder. It trades about 0.03 of its potential returns per unit of risk. Estee Lauder Companies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  6,672  in Estee Lauder Companies on May 26, 2025 and sell it today you would earn a total of  2,451  from holding Estee Lauder Companies or generate 36.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

J J Snack  vs.  Estee Lauder Companies

J J Snack

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in J J Snack are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, J J is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Estee Lauder Companies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Estee Lauder Companies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Estee Lauder disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with J J and Estee Lauder

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

The idea behind J J Snack and Estee Lauder Companies 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.