Correlation Between HE Equipment and Edgewell Personal
Can any of the company-specific risk be diversified away by investing in both HE Equipment and Edgewell Personal 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 HE Equipment and Edgewell Personal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Edgewell Personal Care, you can compare the effects of market volatilities on HE Equipment and Edgewell Personal 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 HE Equipment with a short position of Edgewell Personal. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Edgewell Personal.
Diversification Opportunities for HE Equipment and Edgewell Personal
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HEES and Edgewell is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Edgewell Personal Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewell Personal Care and HE Equipment 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 HE Equipment Services are associated (or correlated) with Edgewell Personal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewell Personal Care has no effect on the direction of HE Equipment i.e., HE Equipment and Edgewell Personal go up and down completely randomly.
Pair Corralation between HE Equipment and Edgewell Personal
Given the investment horizon of 90 days HE Equipment Services is expected to generate 2.56 times more return on investment than Edgewell Personal. However, HE Equipment is 2.56 times more volatile than Edgewell Personal Care. It trades about 0.21 of its potential returns per unit of risk. Edgewell Personal Care is currently generating about 0.17 per unit of risk. If you would invest 5,225 in HE Equipment Services on September 1, 2024 and sell it today you would earn a total of 749.00 from holding HE Equipment Services or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. Edgewell Personal Care
Performance |
| Timeline |
| HE Equipment Services |
| Edgewell Personal Care |
HE Equipment and Edgewell Personal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Edgewell Personal
The main advantage of trading using opposite HE Equipment and Edgewell Personal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment position performs unexpectedly, Edgewell Personal 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 Edgewell Personal will offset losses from the drop in Edgewell Personal's long position.| HE Equipment vs. McGrath RentCorp | HE Equipment vs. Herc Holdings | HE Equipment vs. PROG Holdings | HE Equipment vs. Custom Truck One |
| Edgewell Personal vs. Mannatech Incorporated | Edgewell Personal vs. Inter Parfums | Edgewell Personal vs. Nu Skin Enterprises | Edgewell Personal vs. Helen of Troy |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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