Correlation Between Energizer Holdings and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Energizer Holdings and Legrand SA 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 Legrand SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energizer Holdings and Legrand SA ADR, you can compare the effects of market volatilities on Energizer Holdings and Legrand SA 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 Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energizer Holdings and Legrand SA.
Diversification Opportunities for Energizer Holdings and Legrand SA
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energizer and Legrand is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Energizer Holdings and Legrand SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA ADR 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 Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA ADR has no effect on the direction of Energizer Holdings i.e., Energizer Holdings and Legrand SA go up and down completely randomly.
Pair Corralation between Energizer Holdings and Legrand SA
Considering the 90-day investment horizon Energizer Holdings is expected to generate 1.04 times more return on investment than Legrand SA. However, Energizer Holdings is 1.04 times more volatile than Legrand SA ADR. It trades about 0.16 of its potential returns per unit of risk. Legrand SA ADR is currently generating about -0.02 per unit of risk. If you would invest 2,802 in Energizer Holdings on September 2, 2024 and sell it today you would earn a total of 1,009 from holding Energizer Holdings or generate 36.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energizer Holdings vs. Legrand SA ADR
Performance |
| Timeline |
| Energizer Holdings |
| Legrand SA ADR |
Energizer Holdings and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energizer Holdings and Legrand SA
The main advantage of trading using opposite Energizer Holdings and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energizer Holdings position performs unexpectedly, Legrand SA 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 Legrand SA will offset losses from the drop in Legrand SA'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 |
| Legrand SA vs. AFC Energy plc | Legrand SA vs. Sunrise New Energy | Legrand SA vs. Energizer Holdings | Legrand SA vs. Alfen NV |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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