Correlation Between European Wax and Ainos
Can any of the company-specific risk be diversified away by investing in both European Wax and Ainos 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 European Wax and Ainos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Wax Center and Ainos Inc, you can compare the effects of market volatilities on European Wax and Ainos 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 European Wax with a short position of Ainos. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Wax and Ainos.
Diversification Opportunities for European Wax and Ainos
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between European and Ainos is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding European Wax Center and Ainos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainos Inc and European Wax 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 European Wax Center are associated (or correlated) with Ainos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainos Inc has no effect on the direction of European Wax i.e., European Wax and Ainos go up and down completely randomly.
Pair Corralation between European Wax and Ainos
Given the investment horizon of 90 days European Wax Center is expected to under-perform the Ainos. But the stock apears to be less risky and, when comparing its historical volatility, European Wax Center is 36.76 times less risky than Ainos. The stock trades about -0.06 of its potential returns per unit of risk. The Ainos Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Ainos Inc on August 31, 2024 and sell it today you would lose (29.40) from holding Ainos Inc or give up 91.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.99% |
| Values | Daily Returns |
European Wax Center vs. Ainos Inc
Performance |
| Timeline |
| European Wax Center |
| Ainos Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
European Wax and Ainos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Wax and Ainos
The main advantage of trading using opposite European Wax and Ainos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Wax position performs unexpectedly, Ainos 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 Ainos will offset losses from the drop in Ainos' long position.| European Wax vs. Edgewell Personal Care | European Wax vs. Inter Parfums | European Wax vs. Henkel AG Co | European Wax vs. Mannatech Incorporated |
| Ainos vs. Citizens | Ainos vs. Old Republic International | Ainos vs. Kite Realty Group | Ainos vs. Olympic Steel |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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