Correlation Between Avon Products and Clorox
Can any of the company-specific risk be diversified away by investing in both Avon Products and Clorox 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 Avon Products and Clorox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avon Products and The Clorox, you can compare the effects of market volatilities on Avon Products and Clorox 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 Avon Products with a short position of Clorox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avon Products and Clorox.
Diversification Opportunities for Avon Products and Clorox
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Avon and Clorox is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Avon Products and The Clorox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clorox and Avon Products 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 Avon Products are associated (or correlated) with Clorox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clorox has no effect on the direction of Avon Products i.e., Avon Products and Clorox go up and down completely randomly.
Pair Corralation between Avon Products and Clorox
If you would invest (100.00) in Avon Products on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Avon Products 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 |
Avon Products vs. The Clorox
Performance |
Timeline |
Avon Products |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Clorox |
Avon Products and Clorox Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Avon Products and Clorox
The main advantage of trading using opposite Avon Products and Clorox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avon Products position performs unexpectedly, Clorox 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 Clorox will offset losses from the drop in Clorox's long position.Avon Products vs. Lincoln Educational Services | Avon Products vs. Skillful Craftsman Education | Avon Products vs. Zane Interactive Publishing | Avon Products vs. Ryanair Holdings PLC |
Clorox vs. Unilever PLC ADR | Clorox vs. Estee Lauder Companies | Clorox vs. ELF Beauty | Clorox vs. Coty Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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