Correlation Between Helen Of and Nu Skin

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

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

Diversification Opportunities for Helen Of and Nu Skin

-0.54

Correlation Coefficient

Helen Of  Nu Skin

Excellent diversification

The 3 months correlation between Helen and NUS is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Helen of Troy and Nu Skin Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Skin Enterprises and Helen Of 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 Helen of Troy are associated (or correlated) with Nu Skin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Skin Enterprises has no effect on the direction of Helen Of i.e., Helen Of and Nu Skin go up and down completely randomly.

Pair Corralation between Helen Of and Nu Skin

Given the investment horizon of 90 days Helen of Troy is expected to under-perform the Nu Skin. But the stock apears to be less risky and, when comparing its historical volatility, Helen of Troy is 2.06 times less risky than Nu Skin. The stock trades about -0.11 of its potential returns per unit of risk. The Nu Skin Enterprises is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  671.00  in Nu Skin Enterprises on December 27, 2024 and sell it today you would earn a total of  14.00  from holding Nu Skin Enterprises or generate 2.09% return on investment over 90 days.

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

Helen of Troy  vs.  Nu Skin Enterprises

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

Nu Skin Enterprises

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nu Skin Enterprises are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Nu Skin may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Helen Of and Nu Skin

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

The idea behind Helen of Troy and Nu Skin Enterprises 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.