Correlation Between Acme United and Edgewell Personal

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Acme United and Edgewell Personal 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 Acme United and Edgewell Personal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and Edgewell Personal Care, you can compare the effects of market volatilities on Acme United and Edgewell Personal 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 Acme United with a short position of Edgewell Personal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and Edgewell Personal.

Diversification Opportunities for Acme United and Edgewell Personal

AcmeEdgewellDiversified AwayAcmeEdgewellDiversified Away100%
0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Acme and Edgewell is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and Edgewell Personal Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewell Personal Care and Acme United 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 Acme United are associated (or correlated) with Edgewell Personal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewell Personal Care has no effect on the direction of Acme United i.e., Acme United and Edgewell Personal go up and down completely randomly.

Pair Corralation between Acme United and Edgewell Personal

Considering the 90-day investment horizon Acme United is expected to generate 1.42 times more return on investment than Edgewell Personal. However, Acme United is 1.42 times more volatile than Edgewell Personal Care. It trades about 0.01 of its potential returns per unit of risk. Edgewell Personal Care is currently generating about -0.03 per unit of risk. If you would invest  4,354  in Acme United on September 16, 2024 and sell it today you would lose (25.00) from holding Acme United or give up 0.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Acme United  vs.  Edgewell Personal Care

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -505
JavaScript chart by amCharts 3.21.15ACU EPC
       Timeline  
Acme United 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Acme United has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Acme United is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec3839404142434445
Edgewell Personal Care 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Edgewell Personal Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Edgewell Personal is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec3435363738

Acme United and Edgewell Personal Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.27-4.7-3.12-1.550.01.563.164.756.34 0.050.100.15
JavaScript chart by amCharts 3.21.15ACU EPC
       Returns  

Pair Trading with Acme United and Edgewell Personal

The main advantage of trading using opposite Acme United and Edgewell Personal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, Edgewell Personal 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 Edgewell Personal will offset losses from the drop in Edgewell Personal's long position.
The idea behind Acme United and Edgewell Personal Care 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

Other Complementary Tools

Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon