Correlation Between Edgewell Personal and Bruush Oral

Can any of the company-specific risk be diversified away by investing in both Edgewell Personal and Bruush Oral 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 Bruush Oral 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 Bruush Oral Care, you can compare the effects of market volatilities on Edgewell Personal and Bruush Oral 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 Bruush Oral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgewell Personal and Bruush Oral.

Diversification Opportunities for Edgewell Personal and Bruush Oral

0.62

Correlation Coefficient

Edgewell Personal  Bruush Oral

Poor diversification

The 3 months correlation between Edgewell and Bruush is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Edgewell Personal Care and Bruush Oral Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bruush Oral Care 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 Bruush Oral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bruush Oral Care has no effect on the direction of Edgewell Personal i.e., Edgewell Personal and Bruush Oral go up and down completely randomly.

Pair Corralation between Edgewell Personal and Bruush Oral

If you would invest  3,797  in Edgewell Personal Care on September 6, 2024 and sell it today you would earn a total of  28.00  from holding Edgewell Personal Care or generate 0.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Edgewell Personal Care  vs.  Bruush Oral Care

Edgewell Personal Care

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Edgewell Personal Care are ranked lower than 1 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bruush Oral Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bruush Oral Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Bruush Oral is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Edgewell Personal and Bruush Oral

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

The idea behind Edgewell Personal Care and Bruush Oral 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.