Correlation Between Savers Value and Sally Beauty
Can any of the company-specific risk be diversified away by investing in both Savers Value and Sally Beauty 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 Savers Value and Sally Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Savers Value Village, and Sally Beauty Holdings, you can compare the effects of market volatilities on Savers Value and Sally Beauty 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 Savers Value with a short position of Sally Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Savers Value and Sally Beauty.
Diversification Opportunities for Savers Value and Sally Beauty
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Savers and Sally is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Savers Value Village, and Sally Beauty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sally Beauty Holdings and Savers Value 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 Savers Value Village, are associated (or correlated) with Sally Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sally Beauty Holdings has no effect on the direction of Savers Value i.e., Savers Value and Sally Beauty go up and down completely randomly.
Pair Corralation between Savers Value and Sally Beauty
Considering the 90-day investment horizon Savers Value Village, is expected to under-perform the Sally Beauty. In addition to that, Savers Value is 1.12 times more volatile than Sally Beauty Holdings. It trades about -0.05 of its total potential returns per unit of risk. Sally Beauty Holdings is currently generating about 0.06 per unit of volatility. If you would invest 1,165 in Sally Beauty Holdings on August 28, 2024 and sell it today you would earn a total of 244.00 from holding Sally Beauty Holdings or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Savers Value Village, vs. Sally Beauty Holdings
Performance |
| Timeline |
| Savers Value Village, |
| Sally Beauty Holdings |
Savers Value and Sally Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Savers Value and Sally Beauty
The main advantage of trading using opposite Savers Value and Sally Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Savers Value position performs unexpectedly, Sally Beauty 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 Sally Beauty will offset losses from the drop in Sally Beauty's long position.| Savers Value vs. Yuexiu Transport Infrastructure | Savers Value vs. Encore Capital Group | Savers Value vs. KeyCorp | Savers Value vs. ACG Metals Limited |
| Sally Beauty vs. Oriental Culture Holding | Sally Beauty vs. Hour Loop | Sally Beauty vs. Qurate Retail Series | Sally Beauty vs. Emerge Commerce |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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