Correlation Between CCA Industries and European Wax
Can any of the company-specific risk be diversified away by investing in both CCA Industries 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 CCA Industries and European Wax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCA Industries and European Wax Center, you can compare the effects of market volatilities on CCA Industries 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 CCA Industries with a short position of European Wax. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCA Industries and European Wax.
Diversification Opportunities for CCA Industries and European Wax
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CCA and European is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CCA Industries 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 CCA Industries 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 CCA Industries 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 CCA Industries i.e., CCA Industries and European Wax go up and down completely randomly.
Pair Corralation between CCA Industries and European Wax
Given the investment horizon of 90 days CCA Industries is expected to generate 2.94 times more return on investment than European Wax. However, CCA Industries is 2.94 times more volatile than European Wax Center. It trades about 0.09 of its potential returns per unit of risk. European Wax Center is currently generating about -0.03 per unit of risk. If you would invest 66.00 in CCA Industries on September 3, 2024 and sell it today you would earn a total of 11.00 from holding CCA Industries or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 7.88% |
| Values | Daily Returns |
CCA Industries vs. European Wax Center
Performance |
| Timeline |
| CCA Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| European Wax Center |
CCA Industries and European Wax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCA Industries and European Wax
The main advantage of trading using opposite CCA Industries and European Wax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCA Industries 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.| CCA Industries vs. Firan Technology Group | CCA Industries vs. FitLife Brands, Common | CCA Industries vs. ENB Financial Corp | CCA Industries vs. Surge Components |
| European Wax vs. Edgewell Personal Care | European Wax vs. Inter Parfums | European Wax vs. Mannatech Incorporated | European Wax vs. Spectrum Brands Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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