Correlation Between Waldencast Acquisition and Energizer Holdings
Can any of the company-specific risk be diversified away by investing in both Waldencast Acquisition and Energizer Holdings 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 Waldencast Acquisition and Energizer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waldencast Acquisition Corp and Energizer Holdings, you can compare the effects of market volatilities on Waldencast Acquisition and Energizer Holdings 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 Waldencast Acquisition with a short position of Energizer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waldencast Acquisition and Energizer Holdings.
Diversification Opportunities for Waldencast Acquisition and Energizer Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Waldencast and Energizer is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and Energizer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energizer Holdings and Waldencast Acquisition 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 Waldencast Acquisition Corp are associated (or correlated) with Energizer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energizer Holdings has no effect on the direction of Waldencast Acquisition i.e., Waldencast Acquisition and Energizer Holdings go up and down completely randomly.
Pair Corralation between Waldencast Acquisition and Energizer Holdings
Given the investment horizon of 90 days Waldencast Acquisition Corp is expected to under-perform the Energizer Holdings. In addition to that, Waldencast Acquisition is 2.89 times more volatile than Energizer Holdings. It trades about -0.07 of its total potential returns per unit of risk. Energizer Holdings is currently generating about 0.07 per unit of volatility. If you would invest 2,993 in Energizer Holdings on August 26, 2024 and sell it today you would earn a total of 816.00 from holding Energizer Holdings or generate 27.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waldencast Acquisition Corp vs. Energizer Holdings
Performance |
| Timeline |
| Waldencast Acquisition |
| Energizer Holdings |
Waldencast Acquisition and Energizer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waldencast Acquisition and Energizer Holdings
The main advantage of trading using opposite Waldencast Acquisition and Energizer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waldencast Acquisition position performs unexpectedly, Energizer Holdings 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 Energizer Holdings will offset losses from the drop in Energizer Holdings' long position.| Waldencast Acquisition vs. Where Food Comes | Waldencast Acquisition vs. VTEX | Waldencast Acquisition vs. Vertex | Waldencast Acquisition vs. BASE Inc |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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