Correlation Between Sally Beauty and Fitell Ordinary
Can any of the company-specific risk be diversified away by investing in both Sally Beauty and Fitell Ordinary 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 Sally Beauty and Fitell Ordinary into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sally Beauty Holdings and Fitell Ordinary, you can compare the effects of market volatilities on Sally Beauty and Fitell Ordinary 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 Sally Beauty with a short position of Fitell Ordinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sally Beauty and Fitell Ordinary.
Diversification Opportunities for Sally Beauty and Fitell Ordinary
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sally and Fitell is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sally Beauty Holdings and Fitell Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fitell Ordinary and Sally Beauty 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 Sally Beauty Holdings are associated (or correlated) with Fitell Ordinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fitell Ordinary has no effect on the direction of Sally Beauty i.e., Sally Beauty and Fitell Ordinary go up and down completely randomly.
Pair Corralation between Sally Beauty and Fitell Ordinary
Considering the 90-day investment horizon Sally Beauty is expected to generate 15.49 times less return on investment than Fitell Ordinary. But when comparing it to its historical volatility, Sally Beauty Holdings is 3.74 times less risky than Fitell Ordinary. It trades about 0.02 of its potential returns per unit of risk. Fitell Ordinary is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 505.00 in Fitell Ordinary on September 3, 2024 and sell it today you would earn a total of 2,358 from holding Fitell Ordinary or generate 466.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 67.27% |
| Values | Daily Returns |
Sally Beauty Holdings vs. Fitell Ordinary
Performance |
| Timeline |
| Sally Beauty Holdings |
| Fitell Ordinary |
Sally Beauty and Fitell Ordinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sally Beauty and Fitell Ordinary
The main advantage of trading using opposite Sally Beauty and Fitell Ordinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sally Beauty position performs unexpectedly, Fitell Ordinary 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 Fitell Ordinary will offset losses from the drop in Fitell Ordinary's long position.| Sally Beauty vs. Leslies | Sally Beauty vs. National Vision Holdings | Sally Beauty vs. Sportsmans | Sally Beauty vs. MarineMax |
| Fitell Ordinary vs. MarineMax | Fitell Ordinary vs. Sally Beauty Holdings | Fitell Ordinary vs. Savers Value Village, | Fitell Ordinary vs. Container Store Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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