Correlation Between Unilever Indonesia and Edgewell Personal
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Edgewell Personal 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 Unilever Indonesia and Edgewell Personal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Edgewell Personal Care, you can compare the effects of market volatilities on Unilever Indonesia and Edgewell Personal 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 Unilever Indonesia with a short position of Edgewell Personal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Edgewell Personal.
Diversification Opportunities for Unilever Indonesia and Edgewell Personal
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Unilever and Edgewell is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Edgewell Personal Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewell Personal Care and Unilever Indonesia 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 Unilever Indonesia Tbk are associated (or correlated) with Edgewell Personal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewell Personal Care has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Edgewell Personal go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Edgewell Personal
Assuming the 90 days horizon Unilever Indonesia Tbk is expected to under-perform the Edgewell Personal. In addition to that, Unilever Indonesia is 2.06 times more volatile than Edgewell Personal Care. It trades about -0.06 of its total potential returns per unit of risk. Edgewell Personal Care is currently generating about 0.0 per unit of volatility. If you would invest 3,943 in Edgewell Personal Care on September 3, 2024 and sell it today you would lose (285.00) from holding Edgewell Personal Care or give up 7.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.45% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Edgewell Personal Care
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Edgewell Personal Care |
Unilever Indonesia and Edgewell Personal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Edgewell Personal
The main advantage of trading using opposite Unilever Indonesia and Edgewell Personal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Edgewell Personal 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 Edgewell Personal will offset losses from the drop in Edgewell Personal's long position.| Unilever Indonesia vs. Inter Parfums | Unilever Indonesia vs. European Wax Center | Unilever Indonesia vs. Spectrum Brands Holdings | Unilever Indonesia vs. Edgewell Personal Care |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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