Correlation Between Edgewell Personal and Cortland Bancorp

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

By analyzing existing cross correlation between Edgewell Personal Care and Cortland Bancorp, you can compare the effects of market volatilities on Edgewell Personal and Cortland Bancorp 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 Edgewell Personal with a short position of Cortland Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Cortland Bancorp.

Diversification Opportunities for Edgewell Personal and Cortland Bancorp

0.0

Correlation Coefficient

Edgewell Personal  Cortland Bancorp

Pay attention - limited upside

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

Pair Corralation between Edgewell Personal and Cortland Bancorp

If you would invest  3,588  in Edgewell Personal Care on March 12, 2024 and sell it today you would earn a total of  300.00  from holding Edgewell Personal Care or generate 8.36% return on investment over 90 days.

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

Edgewell Personal Care  vs.  Cortland Bancorp

Edgewell Personal Care

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Edgewell Personal Care are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Edgewell Personal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cortland Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cortland Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Cortland Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Edgewell Personal and Cortland Bancorp

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

The idea behind Edgewell Personal Care and Cortland Bancorp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.