Correlation Between Jeld Wen and European Wax
Can any of the company-specific risk be diversified away by investing in both Jeld Wen and European Wax 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 Jeld Wen and European Wax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and European Wax Center, you can compare the effects of market volatilities on Jeld Wen and European Wax 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 Jeld Wen with a short position of European Wax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and European Wax.
Diversification Opportunities for Jeld Wen and European Wax
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jeld and European is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and European Wax Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Wax Center and Jeld Wen 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 Jeld Wen Holding are associated (or correlated) with European Wax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Wax Center has no effect on the direction of Jeld Wen i.e., Jeld Wen and European Wax go up and down completely randomly.
Pair Corralation between Jeld Wen and European Wax
Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the European Wax. In addition to that, Jeld Wen is 1.14 times more volatile than European Wax Center. It trades about -0.12 of its total potential returns per unit of risk. European Wax Center is currently generating about -0.09 per unit of volatility. If you would invest 719.00 in European Wax Center on September 1, 2024 and sell it today you would lose (118.00) from holding European Wax Center or give up 16.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. European Wax Center
Performance |
| Timeline |
| Jeld Wen Holding |
| European Wax Center |
Jeld Wen and European Wax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and European Wax
The main advantage of trading using opposite Jeld Wen and European Wax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen position performs unexpectedly, European Wax 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 European Wax will offset losses from the drop in European Wax's long position.| Jeld Wen vs. Trex Company | Jeld Wen vs. Armstrong World Industries | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Apogee Enterprises |
| European Wax vs. Edgewell Personal Care | European Wax vs. Inter Parfums | European Wax vs. Henkel AG Co | European Wax 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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