Correlation Between Edgewell Personal and Black Hills
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Black Hills 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 Edgewell Personal and Black Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edgewell Personal Care and Black Hills, you can compare the effects of market volatilities on Edgewell Personal and Black Hills 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 Edgewell Personal with a short position of Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Black Hills.
Diversification Opportunities for Edgewell Personal and Black Hills
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edgewell and Black is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills and Edgewell Personal 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 Edgewell Personal Care are associated (or correlated) with Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Black Hills go up and down completely randomly.
Pair Corralation between Edgewell Personal and Black Hills
Considering the 90-day investment horizon Edgewell Personal is expected to generate 2.25 times less return on investment than Black Hills. In addition to that, Edgewell Personal is 1.12 times more volatile than Black Hills. It trades about 0.0 of its total potential returns per unit of risk. Black Hills is currently generating about 0.01 per unit of volatility. If you would invest 6,483 in Black Hills on September 3, 2024 and sell it today you would lose (76.00) from holding Black Hills or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. Black Hills
Performance |
| Timeline |
| Edgewell Personal Care |
| Black Hills |
Edgewell Personal and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and Black Hills
The main advantage of trading using opposite Edgewell Personal and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| Edgewell Personal vs. Highway Holdings Limited | Edgewell Personal vs. QCR Holdings | Edgewell Personal vs. Partner Communications | Edgewell Personal vs. Acumen Pharmaceuticals |
| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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