Correlation Between European Wax and Core Main
Can any of the company-specific risk be diversified away by investing in both European Wax and Core Main 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 Core Main 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 Core Main, you can compare the effects of market volatilities on European Wax and Core Main 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 Core Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Wax and Core Main.
Diversification Opportunities for European Wax and Core Main
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between European and Core is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding European Wax Center and Core Main in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Main 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 Core Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Main has no effect on the direction of European Wax i.e., European Wax and Core Main go up and down completely randomly.
Pair Corralation between European Wax and Core Main
Given the investment horizon of 90 days European Wax Center is expected to generate 3.44 times more return on investment than Core Main. However, European Wax is 3.44 times more volatile than Core Main. It trades about 0.34 of its potential returns per unit of risk. Core Main is currently generating about 0.4 per unit of risk. If you would invest 515.00 in European Wax Center on October 24, 2024 and sell it today you would earn a total of 172.00 from holding European Wax Center or generate 33.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Wax Center vs. Core Main
Performance |
| Timeline |
| European Wax Center |
| Core Main |
European Wax and Core Main Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Wax and Core Main
The main advantage of trading using opposite European Wax and Core Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Wax position performs unexpectedly, Core Main 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 Core Main will offset losses from the drop in Core Main's long position.| European Wax vs. Edgewell Personal Care | European Wax vs. Inter Parfums | European Wax vs. Henkel AG Co | European Wax vs. Mannatech Incorporated |
| Core Main vs. Distribution Solutions Group | Core Main vs. Global Industrial Co | Core Main vs. Applied Industrial Technologies | Core Main vs. BlueLinx Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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