Correlation Between Naas Technology and Sally Beauty
Can any of the company-specific risk be diversified away by investing in both Naas Technology and Sally Beauty 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 Naas Technology and Sally Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naas Technology ADR and Sally Beauty Holdings, you can compare the effects of market volatilities on Naas Technology and Sally Beauty 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 Naas Technology with a short position of Sally Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naas Technology and Sally Beauty.
Diversification Opportunities for Naas Technology and Sally Beauty
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Naas and Sally is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Naas Technology ADR and Sally Beauty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sally Beauty Holdings and Naas Technology 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 Naas Technology ADR are associated (or correlated) with Sally Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sally Beauty Holdings has no effect on the direction of Naas Technology i.e., Naas Technology and Sally Beauty go up and down completely randomly.
Pair Corralation between Naas Technology and Sally Beauty
Given the investment horizon of 90 days Naas Technology ADR is expected to under-perform the Sally Beauty. In addition to that, Naas Technology is 3.07 times more volatile than Sally Beauty Holdings. It trades about -0.03 of its total potential returns per unit of risk. Sally Beauty Holdings is currently generating about 0.02 per unit of volatility. If you would invest 1,222 in Sally Beauty Holdings on September 4, 2024 and sell it today you would earn a total of 171.00 from holding Sally Beauty Holdings or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Naas Technology ADR vs. Sally Beauty Holdings
Performance |
| Timeline |
| Naas Technology ADR |
| Sally Beauty Holdings |
Naas Technology and Sally Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naas Technology and Sally Beauty
The main advantage of trading using opposite Naas Technology and Sally Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naas Technology position performs unexpectedly, Sally Beauty 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 Sally Beauty will offset losses from the drop in Sally Beauty's long position.| Naas Technology vs. Leslies | Naas Technology vs. Sally Beauty Holdings | Naas Technology vs. ODP Corp | Naas Technology vs. 1 800 FLOWERSCOM |
| Sally Beauty vs. Leslies | Sally Beauty vs. National Vision Holdings | Sally Beauty vs. Sportsmans | Sally Beauty vs. MarineMax |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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