Correlation Between H B and Energizer Holdings

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

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

Diversification Opportunities for H B and Energizer Holdings

0.93

Correlation Coefficient

H B  Energizer Holdings

Almost no diversification

The 3 months correlation between FUL and Energizer is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding H B Fuller and Energizer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energizer Holdings and H B 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 H B Fuller are associated (or correlated) with Energizer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energizer Holdings has no effect on the direction of H B i.e., H B and Energizer Holdings go up and down completely randomly.

Pair Corralation between H B and Energizer Holdings

Considering the 90-day investment horizon H B Fuller is expected to under-perform the Energizer Holdings. In addition to that, H B is 1.27 times more volatile than Energizer Holdings. It trades about -0.33 of its total potential returns per unit of risk. Energizer Holdings is currently generating about -0.33 per unit of volatility. If you would invest  3,865  in Energizer Holdings on December 4, 2024 and sell it today you would lose (857.00) from holding Energizer Holdings or give up 22.17% of portfolio value over 90 days.

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

H B Fuller  vs.  Energizer Holdings

H B Fuller

Risk-Adjusted Performance

Very Weak

Over the last 90 days H B Fuller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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 April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with H B and Energizer Holdings

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

The idea behind H B Fuller and Energizer Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.