Correlation Between Edgewell Personal and Kimberly Clark
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal 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 Edgewell Personal and Kimberly Clark 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 Kimberly Clark de Mexico, you can compare the effects of market volatilities on Edgewell Personal 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 Edgewell Personal with a short position of Kimberly Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Kimberly Clark.
Diversification Opportunities for Edgewell Personal and Kimberly Clark
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Edgewell and Kimberly is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Kimberly Clark de Mexico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark de 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 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 de has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Kimberly Clark go up and down completely randomly.
Pair Corralation between Edgewell Personal and Kimberly Clark
Considering the 90-day investment horizon Edgewell Personal Care is expected to generate 0.67 times more return on investment than Kimberly Clark. However, Edgewell Personal Care is 1.49 times less risky than Kimberly Clark. It trades about 0.02 of its potential returns per unit of risk. Kimberly Clark de Mexico is currently generating about -0.05 per unit of risk. If you would invest 3,484 in Edgewell Personal Care on September 2, 2024 and sell it today you would earn a total of 174.00 from holding Edgewell Personal Care or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. Kimberly Clark de Mexico
Performance |
| Timeline |
| Edgewell Personal Care |
| Kimberly Clark de |
Edgewell Personal and Kimberly Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and Kimberly Clark
The main advantage of trading using opposite Edgewell Personal and Kimberly Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal 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.| Edgewell Personal vs. Seneca Foods Corp | Edgewell Personal vs. Central Garden Pet | Edgewell Personal vs. Central Garden Pet | Edgewell Personal vs. Lifeway Foods |
| Kimberly Clark vs. Reckitt Benckiser Group | Kimberly Clark vs. Church Dwight | Kimberly Clark vs. LOreal Co ADR | Kimberly Clark vs. Shiseido Company |
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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