Correlation Between Hengan International and Kenvue
Can any of the company-specific risk be diversified away by investing in both Hengan International and Kenvue 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 Hengan International and Kenvue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hengan International Group and Kenvue Inc, you can compare the effects of market volatilities on Hengan International and Kenvue 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 Hengan International with a short position of Kenvue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengan International and Kenvue.
Diversification Opportunities for Hengan International and Kenvue
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hengan and Kenvue is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hengan International Group and Kenvue Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenvue Inc and Hengan International 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 Hengan International Group are associated (or correlated) with Kenvue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenvue Inc has no effect on the direction of Hengan International i.e., Hengan International and Kenvue go up and down completely randomly.
Pair Corralation between Hengan International and Kenvue
Assuming the 90 days horizon Hengan International Group is expected to under-perform the Kenvue. In addition to that, Hengan International is 1.32 times more volatile than Kenvue Inc. It trades about -0.09 of its total potential returns per unit of risk. Kenvue Inc is currently generating about 0.21 per unit of volatility. If you would invest 2,284 in Kenvue Inc on September 3, 2024 and sell it today you would earn a total of 124.00 from holding Kenvue Inc or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengan International Group vs. Kenvue Inc
Performance |
| Timeline |
| Hengan International |
| Kenvue Inc |
Hengan International and Kenvue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengan International and Kenvue
The main advantage of trading using opposite Hengan International and Kenvue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengan International position performs unexpectedly, Kenvue 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 Kenvue will offset losses from the drop in Kenvue's long position.| Hengan International vs. LOral SA | Hengan International vs. LOreal Co ADR | Hengan International vs. Unilever PLC ADR | Hengan International vs. Kimberly Clark |
| Kenvue vs. Highway Holdings Limited | Kenvue vs. QCR Holdings | Kenvue vs. Partner Communications | Kenvue vs. Acumen Pharmaceuticals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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