Correlation Between Edgewell Personal and United Guardian
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and United Guardian 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 United Guardian 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 United Guardian, you can compare the effects of market volatilities on Edgewell Personal and United Guardian 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 United Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and United Guardian.
Diversification Opportunities for Edgewell Personal and United Guardian
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edgewell and United is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and United Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Guardian 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 United Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Guardian has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and United Guardian go up and down completely randomly.
Pair Corralation between Edgewell Personal and United Guardian
Considering the 90-day investment horizon Edgewell Personal Care is expected to under-perform the United Guardian. In addition to that, Edgewell Personal is 1.25 times more volatile than United Guardian. It trades about -0.15 of its total potential returns per unit of risk. United Guardian is currently generating about -0.02 per unit of volatility. If you would invest 1,053 in United Guardian on November 28, 2024 and sell it today you would lose (16.00) from holding United Guardian or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. United Guardian
Performance |
| Timeline |
| Edgewell Personal Care |
| United Guardian |
Edgewell Personal and United Guardian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and United Guardian
The main advantage of trading using opposite Edgewell Personal and United Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal position performs unexpectedly, United Guardian 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 United Guardian will offset losses from the drop in United Guardian'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 |
| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Unity Bancorp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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