Correlation Between Yatsen Holding and Henkel AG
Can any of the company-specific risk be diversified away by investing in both Yatsen Holding and Henkel AG 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 Yatsen Holding and Henkel AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yatsen Holding and Henkel AG Co, you can compare the effects of market volatilities on Yatsen Holding and Henkel AG 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 Yatsen Holding with a short position of Henkel AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yatsen Holding and Henkel AG.
Diversification Opportunities for Yatsen Holding and Henkel AG
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yatsen and Henkel is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Yatsen Holding and Henkel AG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henkel AG and Yatsen Holding 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 Yatsen Holding are associated (or correlated) with Henkel AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henkel AG has no effect on the direction of Yatsen Holding i.e., Yatsen Holding and Henkel AG go up and down completely randomly.
Pair Corralation between Yatsen Holding and Henkel AG
Considering the 90-day investment horizon Yatsen Holding is expected to generate 2.27 times more return on investment than Henkel AG. However, Yatsen Holding is 2.27 times more volatile than Henkel AG Co. It trades about 0.01 of its potential returns per unit of risk. Henkel AG Co is currently generating about 0.02 per unit of risk. If you would invest 590.00 in Yatsen Holding on August 26, 2024 and sell it today you would lose (139.00) from holding Yatsen Holding or give up 23.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.98% |
| Values | Daily Returns |
Yatsen Holding vs. Henkel AG Co
Performance |
| Timeline |
| Yatsen Holding |
| Henkel AG |
Yatsen Holding and Henkel AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yatsen Holding and Henkel AG
The main advantage of trading using opposite Yatsen Holding and Henkel AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yatsen Holding position performs unexpectedly, Henkel AG 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 Henkel AG will offset losses from the drop in Henkel AG's long position.| Yatsen Holding vs. 17 Education Technology | Yatsen Holding vs. Ke Holdings | Yatsen Holding vs. Miniso Group Holding | Yatsen Holding vs. Dada Nexus |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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