Correlation Between Nu Skin and Waldencast Acquisition
Can any of the company-specific risk be diversified away by investing in both Nu Skin and Waldencast Acquisition 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 Nu Skin and Waldencast Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Skin Enterprises and Waldencast Acquisition Corp, you can compare the effects of market volatilities on Nu Skin and Waldencast Acquisition 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 Nu Skin with a short position of Waldencast Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Skin and Waldencast Acquisition.
Diversification Opportunities for Nu Skin and Waldencast Acquisition
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NUS and Waldencast is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nu Skin Enterprises and Waldencast Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waldencast Acquisition and Nu Skin 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 Nu Skin Enterprises are associated (or correlated) with Waldencast Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waldencast Acquisition has no effect on the direction of Nu Skin i.e., Nu Skin and Waldencast Acquisition go up and down completely randomly.
Pair Corralation between Nu Skin and Waldencast Acquisition
Considering the 90-day investment horizon Nu Skin Enterprises is expected to generate 0.69 times more return on investment than Waldencast Acquisition. However, Nu Skin Enterprises is 1.44 times less risky than Waldencast Acquisition. It trades about -0.09 of its potential returns per unit of risk. Waldencast Acquisition Corp is currently generating about -0.07 per unit of risk. If you would invest 1,636 in Nu Skin Enterprises on August 24, 2024 and sell it today you would lose (914.00) from holding Nu Skin Enterprises or give up 55.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Nu Skin Enterprises vs. Waldencast Acquisition Corp
Performance |
| Timeline |
| Nu Skin Enterprises |
| Waldencast Acquisition |
Nu Skin and Waldencast Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Skin and Waldencast Acquisition
The main advantage of trading using opposite Nu Skin and Waldencast Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Skin position performs unexpectedly, Waldencast Acquisition 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 Waldencast Acquisition will offset losses from the drop in Waldencast Acquisition's long position.| Nu Skin vs. Herbalife Nutrition | Nu Skin vs. USANA Health Sciences | Nu Skin vs. Inter Parfums | Nu Skin vs. Flowers Foods |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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