Correlation Between Natura Co and Yoshitsu

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

By analyzing existing cross correlation between Natura Co Holding and Yoshitsu Co Ltd, you can compare the effects of market volatilities on Natura Co and Yoshitsu 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 Natura Co with a short position of Yoshitsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natura Co and Yoshitsu.

Diversification Opportunities for Natura Co and Yoshitsu

0.0

Correlation Coefficient

Natura Co  Yoshitsu

Pay attention - limited upside

The 3 months correlation between Natura and Yoshitsu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Natura Co Holding and Yoshitsu Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yoshitsu and Natura Co 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 Natura Co Holding are associated (or correlated) with Yoshitsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yoshitsu has no effect on the direction of Natura Co i.e., Natura Co and Yoshitsu go up and down completely randomly.

Pair Corralation between Natura Co and Yoshitsu

If you would invest (100.00) in Natura Co Holding on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Natura Co Holding or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Natura Co Holding  vs.  Yoshitsu Co Ltd

Natura Co Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natura Co Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Natura Co is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Yoshitsu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yoshitsu Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Yoshitsu is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Natura Co and Yoshitsu

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

The idea behind Natura Co Holding and Yoshitsu Co Ltd 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.