Correlation Between Henkel AG and Yoshitsu
Can any of the company-specific risk be diversified away by investing in both Henkel AG and Yoshitsu 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 Henkel AG and Yoshitsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Henkel AG Co and Yoshitsu Co Ltd, you can compare the effects of market volatilities on Henkel AG and Yoshitsu 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 Henkel AG with a short position of Yoshitsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Henkel AG and Yoshitsu.
Diversification Opportunities for Henkel AG and Yoshitsu
Good diversification
The 3 months correlation between Henkel and Yoshitsu is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Henkel AG Co and Yoshitsu Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yoshitsu and Henkel AG 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 Henkel AG Co are associated (or correlated) with Yoshitsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yoshitsu has no effect on the direction of Henkel AG i.e., Henkel AG and Yoshitsu go up and down completely randomly.
Pair Corralation between Henkel AG and Yoshitsu
Assuming the 90 days horizon Henkel AG Co is expected to generate 0.26 times more return on investment than Yoshitsu. However, Henkel AG Co is 3.9 times less risky than Yoshitsu. It trades about 0.02 of its potential returns per unit of risk. Yoshitsu Co Ltd is currently generating about 0.0 per unit of risk. If you would invest 6,689 in Henkel AG Co on August 26, 2024 and sell it today you would earn a total of 450.00 from holding Henkel AG Co or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.98% |
| Values | Daily Returns |
Henkel AG Co vs. Yoshitsu Co Ltd
Performance |
| Timeline |
| Henkel AG |
| Yoshitsu |
Henkel AG and Yoshitsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Henkel AG and Yoshitsu
The main advantage of trading using opposite Henkel AG and Yoshitsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henkel AG position performs unexpectedly, Yoshitsu 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 Yoshitsu will offset losses from the drop in Yoshitsu's long position.| Henkel AG vs. LOreal Co ADR | Henkel AG vs. Unilever PLC ADR | Henkel AG vs. Kimberly Clark | Henkel AG vs. The Clorox |
| Yoshitsu vs. Inter Parfums | Yoshitsu vs. European Wax Center | Yoshitsu vs. Yatsen Holding | Yoshitsu vs. Edgewell Personal Care |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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