Correlation Between Natura Co and Henkel AG
Can any of the company-specific risk be diversified away by investing in both Natura Co and Henkel AG 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 Henkel AG 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 Henkel AG Co, you can compare the effects of market volatilities on Natura Co and Henkel AG 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 Henkel AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natura Co and Henkel AG.
Diversification Opportunities for Natura Co and Henkel AG
Very weak diversification
The 3 months correlation between Natura and Henkel is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Natura Co Holding and Henkel AG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henkel AG 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 Henkel AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henkel AG has no effect on the direction of Natura Co i.e., Natura Co and Henkel AG go up and down completely randomly.
Pair Corralation between Natura Co and Henkel AG
If you would invest 6,671 in Henkel AG Co on August 24, 2024 and sell it today you would earn a total of 468.00 from holding Henkel AG Co or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.65% |
| Values | Daily Returns |
Natura Co Holding vs. Henkel AG Co
Performance |
| Timeline |
| Natura Co Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Henkel AG |
Natura Co and Henkel AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natura Co and Henkel AG
The main advantage of trading using opposite Natura Co and Henkel AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natura Co position performs unexpectedly, Henkel AG 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 Henkel AG will offset losses from the drop in Henkel AG's long position.| Natura Co vs. Mannatech Incorporated | Natura Co vs. Edgewell Personal Care | Natura Co vs. Inter Parfums | Natura Co vs. Nu Skin Enterprises |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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