Correlation Between Helen Of and Spectrum Brands
Can any of the company-specific risk be diversified away by investing in both Helen Of and Spectrum Brands 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 Spectrum Brands 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 Spectrum Brands Holdings, you can compare the effects of market volatilities on Helen Of and Spectrum Brands 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 Spectrum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helen Of and Spectrum Brands.
Diversification Opportunities for Helen Of and Spectrum Brands
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Helen and Spectrum is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Helen of Troy and Spectrum Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Brands Holdings 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 Spectrum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Brands Holdings has no effect on the direction of Helen Of i.e., Helen Of and Spectrum Brands go up and down completely randomly.
Pair Corralation between Helen Of and Spectrum Brands
Given the investment horizon of 90 days Helen of Troy is expected to generate 1.15 times more return on investment than Spectrum Brands. However, Helen Of is 1.15 times more volatile than Spectrum Brands Holdings. It trades about 0.16 of its potential returns per unit of risk. Spectrum Brands Holdings is currently generating about 0.04 per unit of risk. If you would invest 6,458 in Helen of Troy on August 24, 2024 and sell it today you would earn a total of 448.00 from holding Helen of Troy or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Helen of Troy vs. Spectrum Brands Holdings
Performance |
| Timeline |
| Helen of Troy |
| Spectrum Brands Holdings |
Helen Of and Spectrum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Helen Of and Spectrum Brands
The main advantage of trading using opposite Helen Of and Spectrum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Helen Of position performs unexpectedly, Spectrum Brands 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 Spectrum Brands will offset losses from the drop in Spectrum Brands' long position.| Helen Of vs. Inter Parfums | Helen Of vs. J J Snack | Helen Of vs. Lancaster Colony | Helen Of vs. Dorman Products |
| Spectrum Brands vs. European Wax Center | Spectrum Brands vs. Inter Parfums | Spectrum Brands vs. Mannatech Incorporated | Spectrum Brands vs. Nu Skin Enterprises |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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