Correlation Between Henkel AG and Helen Of

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

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

Diversification Opportunities for Henkel AG and Helen Of

-0.53

Correlation Coefficient

Henkel AG  Helen Of

Excellent diversification

The 3 months correlation between Henkel and Helen is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Henkel AG Co 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 Henkel AG 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 Henkel AG Co 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 Henkel AG i.e., Henkel AG and Helen Of go up and down completely randomly.

Pair Corralation between Henkel AG and Helen Of

Assuming the 90 days horizon Henkel AG Co is expected to under-perform the Helen Of. In addition to that, Henkel AG is 1.63 times more volatile than Helen of Troy. It trades about -0.07 of its total potential returns per unit of risk. Helen of Troy is currently generating about 0.13 per unit of volatility. If you would invest  6,571  in Helen of Troy on September 15, 2024 and sell it today you would earn a total of  271.00  from holding Helen of Troy or generate 4.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Henkel AG Co  vs.  Helen of Troy

Henkel AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Henkel AG Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Henkel AG is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Helen of Troy

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Helen of Troy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Helen Of exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Henkel AG and Helen Of

The main advantage of trading using opposite Henkel AG and Helen Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Henkel AG 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 Henkel AG Co 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..