Correlation Between Avon Protection and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Avon Protection and Naturhouse Health 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 Avon Protection and Naturhouse Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avon Protection PLC and Naturhouse Health SA, you can compare the effects of market volatilities on Avon Protection and Naturhouse Health 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 Avon Protection with a short position of Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avon Protection and Naturhouse Health.
Diversification Opportunities for Avon Protection and Naturhouse Health
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Avon and Naturhouse is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Avon Protection PLC and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health and Avon Protection 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 Avon Protection PLC are associated (or correlated) with Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Avon Protection i.e., Avon Protection and Naturhouse Health go up and down completely randomly.
Pair Corralation between Avon Protection and Naturhouse Health
Assuming the 90 days trading horizon Avon Protection PLC is expected to generate 1.81 times more return on investment than Naturhouse Health. However, Avon Protection is 1.81 times more volatile than Naturhouse Health SA. It trades about 0.13 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.0 per unit of risk. If you would invest 124,600 in Avon Protection PLC on September 12, 2024 and sell it today you would earn a total of 12,000 from holding Avon Protection PLC or generate 9.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avon Protection PLC vs. Naturhouse Health SA
Performance |
| Timeline |
| Avon Protection PLC |
| Naturhouse Health |
Avon Protection and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avon Protection and Naturhouse Health
The main advantage of trading using opposite Avon Protection and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avon Protection position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Avon Protection vs. The Mercantile Investment | Avon Protection vs. Summit Materials Cl | Avon Protection vs. New Residential Investment | Avon Protection vs. Taylor Maritime Investments |
| Naturhouse Health vs. Hong Kong Land | Naturhouse Health vs. Neometals | Naturhouse Health vs. Coor Service Management | Naturhouse Health vs. Fidelity Sustainable USD |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |