Correlation Between Sally Beauty and Naas Technology
Can any of the company-specific risk be diversified away by investing in both Sally Beauty and Naas Technology 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 Naas Technology 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 Naas Technology ADR, you can compare the effects of market volatilities on Sally Beauty and Naas Technology 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 Naas Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sally Beauty and Naas Technology.
Diversification Opportunities for Sally Beauty and Naas Technology
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sally and Naas is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sally Beauty Holdings and Naas Technology ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naas Technology ADR 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 Naas Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naas Technology ADR has no effect on the direction of Sally Beauty i.e., Sally Beauty and Naas Technology go up and down completely randomly.
Pair Corralation between Sally Beauty and Naas Technology
Considering the 90-day investment horizon Sally Beauty Holdings is expected to generate 0.29 times more return on investment than Naas Technology. However, Sally Beauty Holdings is 3.5 times less risky than Naas Technology. It trades about 0.05 of its potential returns per unit of risk. Naas Technology ADR is currently generating about -0.05 per unit of risk. If you would invest 1,105 in Sally Beauty Holdings on September 3, 2024 and sell it today you would earn a total of 288.00 from holding Sally Beauty Holdings or generate 26.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sally Beauty Holdings vs. Naas Technology ADR
Performance |
| Timeline |
| Sally Beauty Holdings |
| Naas Technology ADR |
Sally Beauty and Naas Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sally Beauty and Naas Technology
The main advantage of trading using opposite Sally Beauty and Naas Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sally Beauty position performs unexpectedly, Naas Technology 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 Naas Technology will offset losses from the drop in Naas Technology's long position.| Sally Beauty vs. Leslies | Sally Beauty vs. National Vision Holdings | Sally Beauty vs. Sportsmans | Sally Beauty vs. MarineMax |
| Naas Technology vs. Leslies | Naas Technology vs. Sally Beauty Holdings | Naas Technology vs. ODP Corp | Naas Technology vs. 1 800 FLOWERSCOM |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |