Correlation Between Natura Co and Edgewell Personal

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Can any of the company-specific risk be diversified away by investing in both Natura Co and Edgewell Personal 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 Natura Co and Edgewell Personal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natura Co Holding and Edgewell Personal Care, you can compare the effects of market volatilities on Natura Co and Edgewell Personal 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 Natura Co with a short position of Edgewell Personal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natura Co and Edgewell Personal.

Diversification Opportunities for Natura Co and Edgewell Personal

NaturaEdgewellDiversified AwayNaturaEdgewellDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Natura and Edgewell is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Natura Co Holding and Edgewell Personal Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewell Personal Care and Natura Co 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 Natura Co Holding are associated (or correlated) with Edgewell Personal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewell Personal Care has no effect on the direction of Natura Co i.e., Natura Co and Edgewell Personal go up and down completely randomly.

Pair Corralation between Natura Co and Edgewell Personal

If you would invest (100.00) in Natura Co Holding on November 26, 2024 and sell it today you would earn a total of  100.00  from holding Natura Co Holding or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Natura Co Holding  vs.  Edgewell Personal Care

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50510
JavaScript chart by amCharts 3.21.15NTCO EPC
       Timeline  
Natura Co Holding 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Natura Co Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Natura Co is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Edgewell Personal Care 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Edgewell Personal Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb283032343638

Natura Co and Edgewell Personal Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15NTCO EPC
       Returns  

Pair Trading with Natura Co and Edgewell Personal

The main advantage of trading using opposite Natura Co and Edgewell Personal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natura Co position performs unexpectedly, Edgewell Personal 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 Edgewell Personal will offset losses from the drop in Edgewell Personal's long position.
The idea behind Natura Co Holding and Edgewell Personal Care pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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