Correlation Between Edgewell Personal and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Edgewell Personal and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Dow Jones.
Diversification Opportunities for Edgewell Personal and Dow Jones
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edgewell and Dow is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Dow Jones go up and down completely randomly.
Pair Corralation between Edgewell Personal and Dow Jones
Considering the 90-day investment horizon Edgewell Personal is expected to generate 1.24 times less return on investment than Dow Jones. In addition to that, Edgewell Personal is 1.49 times more volatile than Dow Jones Industrial. It trades about 0.14 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. Dow Jones Industrial
Performance |
| Timeline |
Edgewell Personal and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Edgewell Personal Care
Pair trading matchups for Edgewell Personal
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Edgewell Personal and Dow Jones
The main advantage of trading using opposite Edgewell Personal and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Edgewell Personal vs. Mannatech Incorporated | Edgewell Personal vs. Inter Parfums | Edgewell Personal vs. Nu Skin Enterprises | Edgewell Personal vs. Helen of Troy |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |