Correlation Between Edgewell Personal and Adtalem Global

Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Adtalem Global 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 Edgewell Personal and Adtalem Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Edgewell Personal Care and Adtalem Global Education, you can compare the effects of market volatilities on Edgewell Personal and Adtalem Global 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 Edgewell Personal with a short position of Adtalem Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Adtalem Global.

Diversification Opportunities for Edgewell Personal and Adtalem Global

-0.53

Correlation Coefficient

Edgewell Personal  Adtalem Global

Excellent diversification

The 3 months correlation between Edgewell and Adtalem is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Adtalem Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adtalem Global Education and Edgewell Personal 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 Edgewell Personal Care are associated (or correlated) with Adtalem Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adtalem Global Education has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Adtalem Global go up and down completely randomly.

Pair Corralation between Edgewell Personal and Adtalem Global

Considering the 90-day investment horizon Edgewell Personal Care is expected to under-perform the Adtalem Global. But the stock apears to be less risky and, when comparing its historical volatility, Edgewell Personal Care is 1.23 times less risky than Adtalem Global. The stock trades about -0.11 of its potential returns per unit of risk. The Adtalem Global Education is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9,211  in Adtalem Global Education on December 26, 2024 and sell it today you would earn a total of  917.00  from holding Adtalem Global Education or generate 9.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Edgewell Personal Care  vs.  Adtalem Global Education

Edgewell Personal Care

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edgewell Personal Care 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 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.

Adtalem Global Education

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Adtalem Global Education are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Adtalem Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Edgewell Personal and Adtalem Global

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

The idea behind Edgewell Personal Care and Adtalem Global Education 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.