Correlation Between Energizer Holdings and Kimberly Clark
Can any of the company-specific risk be diversified away by investing in both Energizer Holdings and Kimberly Clark 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 Kimberly Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energizer Holdings and Kimberly Clark, you can compare the effects of market volatilities on Energizer Holdings and Kimberly Clark 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 Kimberly Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energizer Holdings and Kimberly Clark.
Diversification Opportunities for Energizer Holdings and Kimberly Clark
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energizer and Kimberly is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Energizer Holdings and Kimberly Clark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark 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 Kimberly Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimberly Clark has no effect on the direction of Energizer Holdings i.e., Energizer Holdings and Kimberly Clark go up and down completely randomly.
Pair Corralation between Energizer Holdings and Kimberly Clark
Considering the 90-day investment horizon Energizer Holdings is expected to generate 1.53 times more return on investment than Kimberly Clark. However, Energizer Holdings is 1.53 times more volatile than Kimberly Clark. It trades about 0.06 of its potential returns per unit of risk. Kimberly Clark is currently generating about 0.06 per unit of risk. If you would invest 2,896 in Energizer Holdings on August 29, 2024 and sell it today you would earn a total of 930.00 from holding Energizer Holdings or generate 32.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energizer Holdings vs. Kimberly Clark
Performance |
| Timeline |
| Energizer Holdings |
| Kimberly Clark |
Energizer Holdings and Kimberly Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energizer Holdings and Kimberly Clark
The main advantage of trading using opposite Energizer Holdings and Kimberly Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energizer Holdings position performs unexpectedly, Kimberly Clark 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 Kimberly Clark will offset losses from the drop in Kimberly Clark'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 |
| Kimberly Clark vs. Colgate Palmolive | Kimberly Clark vs. Church Dwight | Kimberly Clark vs. Unilever PLC ADR | Kimberly Clark vs. Procter Gamble |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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