Correlation Between WD 40 and Helen Of

Can any of the company-specific risk be diversified away by investing in both WD 40 and Helen Of 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 WD 40 and Helen Of into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WD 40 Company and Helen of Troy, you can compare the effects of market volatilities on WD 40 and Helen Of 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 WD 40 with a short position of Helen Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of WD 40 and Helen Of.

Diversification Opportunities for WD 40 and Helen Of

0.89

Correlation Coefficient

WD 40  Helen Of

Very poor diversification

The 3 months correlation between WDFC and Helen is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding WD 40 Company and Helen of Troy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helen of Troy and WD 40 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 WD 40 Company are associated (or correlated) with Helen Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helen of Troy has no effect on the direction of WD 40 i.e., WD 40 and Helen Of go up and down completely randomly.

Pair Corralation between WD 40 and Helen Of

Given the investment horizon of 90 days WD 40 Company is expected to generate 0.88 times more return on investment than Helen Of. However, WD 40 Company is 1.14 times less risky than Helen Of. It trades about -0.16 of its potential returns per unit of risk. Helen of Troy is currently generating about -0.27 per unit of risk. If you would invest  26,508  in WD 40 Company on February 2, 2024 and sell it today you would lose (3,437) from holding WD 40 Company or give up 12.97% of portfolio value over 90 days.

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

WD 40 Company  vs.  Helen of Troy

WD 40 Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WD 40 Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Helen of Troy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helen of Troy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with WD 40 and Helen Of

The main advantage of trading using opposite WD 40 and Helen Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WD 40 position performs unexpectedly, Helen Of 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 Helen Of will offset losses from the drop in Helen Of's long position.

The idea behind WD 40 Company and Helen of Troy 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.