Correlation Between Energizer Holdings and Kimberly Clark

Can any of the company-specific risk be diversified away by investing in both Energizer Holdings and Kimberly Clark 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 Energizer Holdings and Kimberly Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Energizer Holdings and Kimberly Clark, you can compare the effects of market volatilities on Energizer Holdings and Kimberly Clark 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 Energizer Holdings with a short position of Kimberly Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energizer Holdings and Kimberly Clark.

Diversification Opportunities for Energizer Holdings and Kimberly Clark

0.15

Correlation Coefficient

Energizer Holdings  Kimberly Clark

Average diversification

The 3 months correlation between Energizer and Kimberly is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Energizer Holdings and Kimberly Clark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark and Energizer Holdings 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 Energizer Holdings are associated (or correlated) with Kimberly Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimberly Clark has no effect on the direction of Energizer Holdings i.e., Energizer Holdings and Kimberly Clark go up and down completely randomly.

Pair Corralation between Energizer Holdings and Kimberly Clark

Considering the 90-day investment horizon Energizer Holdings is expected to under-perform the Kimberly Clark. In addition to that, Energizer Holdings is 1.29 times more volatile than Kimberly Clark. It trades about -0.23 of its total potential returns per unit of risk. Kimberly Clark is currently generating about 0.04 per unit of volatility. If you would invest  13,797  in Kimberly Clark on November 27, 2024 and sell it today you would earn a total of  333.50  from holding Kimberly Clark or generate 2.42% return on investment over 90 days.

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

Energizer Holdings  vs.  Kimberly Clark

Energizer Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energizer Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kimberly Clark

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kimberly Clark are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Kimberly Clark is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Energizer Holdings and Kimberly Clark

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

The idea behind Energizer Holdings and Kimberly Clark 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.