Correlation Between European Wax and 26442UAQ7

Can any of the company-specific risk be diversified away by investing in both European Wax and 26442UAQ7 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 26442UAQ7 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 DUK 525 15 MAR 33, you can compare the effects of market volatilities on European Wax and 26442UAQ7 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 26442UAQ7. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Wax and 26442UAQ7.

Diversification Opportunities for European Wax and 26442UAQ7

0.05

Correlation Coefficient

European Wax  26442UAQ7

Significant diversification

The 3 months correlation between European and 26442UAQ7 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding European Wax Center and DUK 525 15 MAR 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUK 525 15 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 26442UAQ7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUK 525 15 has no effect on the direction of European Wax i.e., European Wax and 26442UAQ7 go up and down completely randomly.

Pair Corralation between European Wax and 26442UAQ7

Given the investment horizon of 90 days European Wax Center is expected to generate 9.14 times more return on investment than 26442UAQ7. However, European Wax is 9.14 times more volatile than DUK 525 15 MAR 33. It trades about 0.03 of its potential returns per unit of risk. DUK 525 15 MAR 33 is currently generating about -0.11 per unit of risk. If you would invest  678.00  in European Wax Center on October 24, 2024 and sell it today you would earn a total of  9.00  from holding European Wax Center or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

European Wax Center  vs.  DUK 525 15 MAR 33

European Wax Center

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in European Wax Center are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, European Wax may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DUK 525 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUK 525 15 MAR 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442UAQ7 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with European Wax and 26442UAQ7

The main advantage of trading using opposite European Wax and 26442UAQ7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Wax position performs unexpectedly, 26442UAQ7 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 26442UAQ7 will offset losses from the drop in 26442UAQ7's long position.

The idea behind European Wax Center and DUK 525 15 MAR 33 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.