Correlation Between Helen Of and Henkel AG
Can any of the company-specific risk be diversified away by investing in both Helen Of and Henkel AG 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 Helen Of and Henkel AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Helen of Troy and Henkel AG Co, you can compare the effects of market volatilities on Helen Of and Henkel AG 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 Helen Of with a short position of Henkel AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helen Of and Henkel AG.
Diversification Opportunities for Helen Of and Henkel AG
Significant diversification
The 3 months correlation between Helen and Henkel is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Helen of Troy and Henkel AG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henkel AG and Helen Of 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 Helen of Troy are associated (or correlated) with Henkel AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henkel AG has no effect on the direction of Helen Of i.e., Helen Of and Henkel AG go up and down completely randomly.
Pair Corralation between Helen Of and Henkel AG
Given the investment horizon of 90 days Helen of Troy is expected to generate 0.87 times more return on investment than Henkel AG. However, Helen of Troy is 1.15 times less risky than Henkel AG. It trades about 0.16 of its potential returns per unit of risk. Henkel AG Co is currently generating about -0.2 per unit of risk. If you would invest 6,603 in Helen of Troy on August 28, 2024 and sell it today you would earn a total of 469.00 from holding Helen of Troy or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helen of Troy vs. Henkel AG Co
Performance |
| Timeline |
| Helen of Troy |
| Henkel AG |
Helen Of and Henkel AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helen Of and Henkel AG
The main advantage of trading using opposite Helen Of and Henkel AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helen Of position performs unexpectedly, Henkel AG 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 Henkel AG will offset losses from the drop in Henkel AG's long position.| Helen Of vs. Inter Parfums | Helen Of vs. J J Snack | Helen Of vs. Lancaster Colony | Helen Of vs. Dorman Products |
| Henkel AG vs. European Wax Center | Henkel AG vs. Edgewell Personal Care | Henkel AG vs. Inter Parfums | Henkel AG vs. Mannatech Incorporated |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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