Correlation Between Edgewell Personal and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Sellas Life 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 Sellas Life 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 Sellas Life Sciences, you can compare the effects of market volatilities on Edgewell Personal and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Sellas Life.
Diversification Opportunities for Edgewell Personal and Sellas Life
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Edgewell and Sellas is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Sellas Life go up and down completely randomly.
Pair Corralation between Edgewell Personal and Sellas Life
Considering the 90-day investment horizon Edgewell Personal Care is expected to generate 0.39 times more return on investment than Sellas Life. However, Edgewell Personal Care is 2.59 times less risky than Sellas Life. It trades about 0.17 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about -0.05 per unit of risk. If you would invest 3,495 in Edgewell Personal Care on September 1, 2024 and sell it today you would earn a total of 163.00 from holding Edgewell Personal Care or generate 4.66% 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. Sellas Life Sciences
Performance |
| Timeline |
| Edgewell Personal Care |
| Sellas Life Sciences |
Edgewell Personal and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and Sellas Life
The main advantage of trading using opposite Edgewell Personal and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life's long position.| Edgewell Personal vs. Mannatech Incorporated | Edgewell Personal vs. Inter Parfums | Edgewell Personal vs. Nu Skin Enterprises | Edgewell Personal vs. Helen of Troy |
| Sellas Life vs. Tff Pharmaceuticals | Sellas Life vs. Eliem Therapeutics | Sellas Life vs. Inhibrx | Sellas Life vs. Enliven Therapeutics |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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