Correlation Between European Wax and Granite Falls
Can any of the company-specific risk be diversified away by investing in both European Wax and Granite Falls 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 Granite Falls 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 Granite Falls Energy, you can compare the effects of market volatilities on European Wax and Granite Falls 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 Granite Falls. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Wax and Granite Falls.
Diversification Opportunities for European Wax and Granite Falls
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between European and Granite is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding European Wax Center and Granite Falls Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Falls Energy 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 Granite Falls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Falls Energy has no effect on the direction of European Wax i.e., European Wax and Granite Falls go up and down completely randomly.
Pair Corralation between European Wax and Granite Falls
Given the investment horizon of 90 days European Wax Center is expected to under-perform the Granite Falls. In addition to that, European Wax is 2.57 times more volatile than Granite Falls Energy. It trades about -0.03 of its total potential returns per unit of risk. Granite Falls Energy is currently generating about -0.03 per unit of volatility. If you would invest 390,000 in Granite Falls Energy on September 1, 2024 and sell it today you would lose (90,000) from holding Granite Falls Energy or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Wax Center vs. Granite Falls Energy
Performance |
| Timeline |
| European Wax Center |
| Granite Falls Energy |
European Wax and Granite Falls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Wax and Granite Falls
The main advantage of trading using opposite European Wax and Granite Falls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Wax position performs unexpectedly, Granite Falls 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 Granite Falls will offset losses from the drop in Granite Falls' long position.| European Wax vs. Edgewell Personal Care | European Wax vs. Inter Parfums | European Wax vs. Henkel AG Co | European Wax vs. Mannatech Incorporated |
| Granite Falls vs. European Wax Center | Granite Falls vs. Lincoln Electric Holdings | Granite Falls vs. Ardelyx | Granite Falls vs. Mink 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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