Correlation Between Edgewell Personal and Getty Images
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Getty Images 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 Getty Images 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 Getty Images Holdings, you can compare the effects of market volatilities on Edgewell Personal and Getty Images 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 Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Getty Images.
Diversification Opportunities for Edgewell Personal and Getty Images
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Edgewell and Getty is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings 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 Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Getty Images go up and down completely randomly.
Pair Corralation between Edgewell Personal and Getty Images
Considering the 90-day investment horizon Edgewell Personal Care is expected to generate 0.27 times more return on investment than Getty Images. However, Edgewell Personal Care is 3.73 times less risky than Getty Images. It trades about 0.16 of its potential returns per unit of risk. Getty Images Holdings is currently generating about -0.23 per unit of risk. If you would invest 3,523 in Edgewell Personal Care on August 29, 2024 and sell it today you would earn a total of 174.00 from holding Edgewell Personal Care or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. Getty Images Holdings
Performance |
| Timeline |
| Edgewell Personal Care |
| Getty Images Holdings |
Edgewell Personal and Getty Images Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and Getty Images
The main advantage of trading using opposite Edgewell Personal and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.| Edgewell Personal vs. Mannatech Incorporated | Edgewell Personal vs. Inter Parfums | Edgewell Personal vs. Nu Skin Enterprises | Edgewell Personal vs. Helen of Troy |
| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
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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