Correlation Between United Guardian and Energizer Holdings

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

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

Diversification Opportunities for United Guardian and Energizer Holdings

-0.73

Correlation Coefficient

United Guardian  Energizer Holdings

Pay attention - limited upside

The 3 months correlation between United and Energizer is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Energizer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energizer Holdings and United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and Energizer Holdings go up and down completely randomly.

Pair Corralation between United Guardian and Energizer Holdings

Allowing for the 90-day total investment horizon United Guardian is expected to generate 1.32 times more return on investment than Energizer Holdings. However, United Guardian is 1.32 times more volatile than Energizer Holdings. It trades about 0.07 of its potential returns per unit of risk. Energizer Holdings is currently generating about -0.23 per unit of risk. If you would invest  953.00  in United Guardian on November 28, 2024 and sell it today you would earn a total of  66.00  from holding United Guardian or generate 6.93% return on investment over 90 days.

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

United Guardian  vs.  Energizer Holdings

United Guardian

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in United Guardian are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, United Guardian may actually be approaching a critical reversion point that can send shares even higher in March 2025.

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

Pair Trading with United Guardian and Energizer Holdings

The main advantage of trading using opposite United Guardian and Energizer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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 United Guardian 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.