Correlation Between Ulta Beauty and Grupo SBF

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

By analyzing existing cross correlation between Ulta Beauty and Grupo SBF SA, you can compare the effects of market volatilities on Ulta Beauty and Grupo SBF 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 Ulta Beauty with a short position of Grupo SBF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ulta Beauty and Grupo SBF.

Diversification Opportunities for Ulta Beauty and Grupo SBF

0.84

Correlation Coefficient

Ulta Beauty  Grupo SBF

Very poor diversification

The 3 months correlation between Ulta and Grupo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ulta Beauty and Grupo SBF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo SBF SA and Ulta Beauty 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 Ulta Beauty are associated (or correlated) with Grupo SBF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo SBF SA has no effect on the direction of Ulta Beauty i.e., Ulta Beauty and Grupo SBF go up and down completely randomly.

Pair Corralation between Ulta Beauty and Grupo SBF

Assuming the 90 days trading horizon Ulta Beauty is expected to generate 0.84 times more return on investment than Grupo SBF. However, Ulta Beauty is 1.2 times less risky than Grupo SBF. It trades about 0.18 of its potential returns per unit of risk. Grupo SBF SA is currently generating about 0.07 per unit of risk. If you would invest  11,000  in Ulta Beauty on April 25, 2025 and sell it today you would earn a total of  3,000  from holding Ulta Beauty or generate 27.27% return on investment over 90 days.

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

Ulta Beauty  vs.  Grupo SBF SA

Ulta Beauty

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ulta Beauty are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Ulta Beauty sustained solid returns over the last few months and may actually be approaching a breakup point.

Grupo SBF SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo SBF SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Grupo SBF may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Ulta Beauty and Grupo SBF

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

The idea behind Ulta Beauty and Grupo SBF SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..