Correlation Between Albertsons Companies and European Wax
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and European Wax 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 Albertsons Companies and European Wax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and European Wax Center, you can compare the effects of market volatilities on Albertsons Companies and European Wax 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 Albertsons Companies with a short position of European Wax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and European Wax.
Diversification Opportunities for Albertsons Companies and European Wax
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Albertsons and European is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and European Wax Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Wax Center and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with European Wax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Wax Center has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and European Wax go up and down completely randomly.
Pair Corralation between Albertsons Companies and European Wax
Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.19 times more return on investment than European Wax. However, Albertsons Companies is 5.22 times less risky than European Wax. It trades about 0.31 of its potential returns per unit of risk. European Wax Center is currently generating about -0.1 per unit of risk. If you would invest 1,801 in Albertsons Companies on August 30, 2024 and sell it today you would earn a total of 161.00 from holding Albertsons Companies or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. European Wax Center
Performance |
| Timeline |
| Albertsons Companies |
| European Wax Center |
Albertsons Companies and European Wax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and European Wax
The main advantage of trading using opposite Albertsons Companies and European Wax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, European Wax 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 European Wax will offset losses from the drop in European Wax's long position.| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
| European Wax vs. Edgewell Personal Care | European Wax vs. Inter Parfums | European Wax vs. Henkel AG Co | European Wax vs. Mannatech Incorporated |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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