Correlation Between Edgewell Personal and Yatsen Holding
Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Yatsen Holding 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 Yatsen Holding 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 Yatsen Holding, you can compare the effects of market volatilities on Edgewell Personal and Yatsen Holding 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 Yatsen Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Yatsen Holding.
Diversification Opportunities for Edgewell Personal and Yatsen Holding
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edgewell and Yatsen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Yatsen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatsen Holding 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 Yatsen Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatsen Holding has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Yatsen Holding go up and down completely randomly.
Pair Corralation between Edgewell Personal and Yatsen Holding
Considering the 90-day investment horizon Edgewell Personal Care is expected to under-perform the Yatsen Holding. But the stock apears to be less risky and, when comparing its historical volatility, Edgewell Personal Care is 3.0 times less risky than Yatsen Holding. The stock trades about 0.0 of its potential returns per unit of risk. The Yatsen Holding is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Yatsen Holding on August 28, 2024 and sell it today you would lose (126.00) from holding Yatsen Holding or give up 21.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edgewell Personal Care vs. Yatsen Holding
Performance |
| Timeline |
| Edgewell Personal Care |
| Yatsen Holding |
Edgewell Personal and Yatsen Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edgewell Personal and Yatsen Holding
The main advantage of trading using opposite Edgewell Personal and Yatsen Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgewell Personal position performs unexpectedly, Yatsen Holding 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 Yatsen Holding will offset losses from the drop in Yatsen Holding'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 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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