Correlation Between HSN and Sally Beauty
Can any of the company-specific risk be diversified away by investing in both HSN and Sally Beauty 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 HSN and Sally Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSN Inc and Sally Beauty Holdings, you can compare the effects of market volatilities on HSN and Sally Beauty 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 HSN with a short position of Sally Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSN and Sally Beauty.
Diversification Opportunities for HSN and Sally Beauty
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HSN and Sally is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HSN Inc and Sally Beauty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sally Beauty Holdings and HSN 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 HSN Inc are associated (or correlated) with Sally Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sally Beauty Holdings has no effect on the direction of HSN i.e., HSN and Sally Beauty go up and down completely randomly.
Pair Corralation between HSN and Sally Beauty
If you would invest (100.00) in HSN Inc on February 12, 2024 and sell it today you would earn a total of 100.00 from holding HSN Inc 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 |
HSN Inc vs. Sally Beauty Holdings
Performance |
| Timeline |
| HSN Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sally Beauty Holdings |
HSN and Sally Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSN and Sally Beauty
The main advantage of trading using opposite HSN and Sally Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSN position performs unexpectedly, Sally Beauty 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 Sally Beauty will offset losses from the drop in Sally Beauty's long position.The idea behind HSN Inc and Sally Beauty 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.| Sally Beauty vs. LesliesInc | Sally Beauty vs. National Vision Holdings | Sally Beauty vs. Sportsmans | Sally Beauty vs. MarineMax |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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