Correlation Between Big Tree and Helen Of

Can any of the company-specific risk be diversified away by investing in both Big Tree and Helen Of 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 Big Tree and Helen Of into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Big Tree Cloud and Helen of Troy, you can compare the effects of market volatilities on Big Tree and Helen Of 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 Big Tree with a short position of Helen Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Tree and Helen Of.

Diversification Opportunities for Big Tree and Helen Of

0.68

Correlation Coefficient

Big Tree  Helen Of

Poor diversification

The 3 months correlation between Big and Helen is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Big Tree Cloud and Helen of Troy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helen of Troy and Big Tree 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 Big Tree Cloud are associated (or correlated) with Helen Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helen of Troy has no effect on the direction of Big Tree i.e., Big Tree and Helen Of go up and down completely randomly.

Pair Corralation between Big Tree and Helen Of

Considering the 90-day investment horizon Big Tree Cloud is expected to under-perform the Helen Of. In addition to that, Big Tree is 4.53 times more volatile than Helen of Troy. It trades about -0.14 of its total potential returns per unit of risk. Helen of Troy is currently generating about -0.12 per unit of volatility. If you would invest  6,128  in Helen of Troy on December 26, 2024 and sell it today you would lose (983.00) from holding Helen of Troy or give up 16.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Big Tree Cloud  vs.  Helen of Troy

Big Tree Cloud

Risk-Adjusted Performance

Very Weak

Over the last 90 days Big Tree Cloud has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Helen of Troy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helen of Troy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Big Tree and Helen Of

The main advantage of trading using opposite Big Tree and Helen Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Tree position performs unexpectedly, Helen Of 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 Helen Of will offset losses from the drop in Helen Of's long position.

The idea behind Big Tree Cloud and Helen of Troy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.