Correlation Between European Wax and Helen Of

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

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

Diversification Opportunities for European Wax and Helen Of

-0.43

Correlation Coefficient

European Wax  Helen Of

Very good diversification

The 3 months correlation between European and Helen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding European Wax Center 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 European Wax 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 European Wax Center 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 European Wax i.e., European Wax and Helen Of go up and down completely randomly.

Pair Corralation between European Wax and Helen Of

Given the investment horizon of 90 days European Wax Center is expected to generate 2.04 times more return on investment than Helen Of. However, European Wax is 2.04 times more volatile than Helen of Troy. It trades about 0.05 of its potential returns per unit of risk. Helen of Troy is currently generating about -0.21 per unit of risk. If you would invest  601.00  in European Wax Center on November 28, 2024 and sell it today you would earn a total of  49.00  from holding European Wax Center or generate 8.15% return on investment over 90 days.

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

European Wax Center  vs.  Helen of Troy

European Wax Center

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in European Wax Center are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, European Wax showed solid returns over the last few months and may actually be approaching a breakup point.

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 March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with European Wax and Helen Of

The main advantage of trading using opposite European Wax and Helen Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Wax 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 European Wax Center 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.