Correlation Between Energizer Holdings and European Wax
Can any of the company-specific risk be diversified away by investing in both Energizer Holdings 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 Energizer Holdings and European Wax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energizer Holdings and European Wax Center, you can compare the effects of market volatilities on Energizer Holdings 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 Energizer Holdings with a short position of European Wax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energizer Holdings and European Wax.
Diversification Opportunities for Energizer Holdings and European Wax
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energizer and European is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Energizer Holdings 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 Energizer Holdings 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 Energizer Holdings 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 Energizer Holdings i.e., Energizer Holdings and European Wax go up and down completely randomly.
Pair Corralation between Energizer Holdings and European Wax
Considering the 90-day investment horizon Energizer Holdings is expected to generate 0.51 times more return on investment than European Wax. However, Energizer Holdings is 1.98 times less risky than European Wax. It trades about 0.03 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 3,216 in Energizer Holdings on August 27, 2024 and sell it today you would earn a total of 614.00 from holding Energizer Holdings or generate 19.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energizer Holdings vs. European Wax Center
Performance |
| Timeline |
| Energizer Holdings |
| European Wax Center |
Energizer Holdings and European Wax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energizer Holdings and European Wax
The main advantage of trading using opposite Energizer Holdings and European Wax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energizer Holdings 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.| Energizer Holdings vs. Acuity Brands | Energizer Holdings vs. Espey Mfg Electronics | Energizer Holdings vs. Preformed Line Products | Energizer Holdings vs. Kimball Electronics |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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