Correlation Between PACIFIC ONLINE and NEWELL RUBBERMAID
Can any of the company-specific risk be diversified away by investing in both PACIFIC ONLINE and NEWELL RUBBERMAID 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 PACIFIC ONLINE and NEWELL RUBBERMAID into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PACIFIC ONLINE and NEWELL RUBBERMAID , you can compare the effects of market volatilities on PACIFIC ONLINE and NEWELL RUBBERMAID 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 PACIFIC ONLINE with a short position of NEWELL RUBBERMAID. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACIFIC ONLINE and NEWELL RUBBERMAID.
Diversification Opportunities for PACIFIC ONLINE and NEWELL RUBBERMAID
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PACIFIC and NEWELL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC ONLINE and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID and PACIFIC ONLINE 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 PACIFIC ONLINE are associated (or correlated) with NEWELL RUBBERMAID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL RUBBERMAID has no effect on the direction of PACIFIC ONLINE i.e., PACIFIC ONLINE and NEWELL RUBBERMAID go up and down completely randomly.
Pair Corralation between PACIFIC ONLINE and NEWELL RUBBERMAID
Assuming the 90 days trading horizon PACIFIC ONLINE is expected to generate 0.7 times more return on investment than NEWELL RUBBERMAID. However, PACIFIC ONLINE is 1.43 times less risky than NEWELL RUBBERMAID. It trades about 0.05 of its potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about 0.03 per unit of risk. If you would invest 10.00 in PACIFIC ONLINE on September 2, 2024 and sell it today you would earn a total of 5.00 from holding PACIFIC ONLINE or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
PACIFIC ONLINE vs. NEWELL RUBBERMAID
Performance |
| Timeline |
| PACIFIC ONLINE |
| NEWELL RUBBERMAID |
PACIFIC ONLINE and NEWELL RUBBERMAID Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PACIFIC ONLINE and NEWELL RUBBERMAID
The main advantage of trading using opposite PACIFIC ONLINE and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC ONLINE position performs unexpectedly, NEWELL RUBBERMAID 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 NEWELL RUBBERMAID will offset losses from the drop in NEWELL RUBBERMAID's long position.| PACIFIC ONLINE vs. SIVERS SEMICONDUCTORS AB | PACIFIC ONLINE vs. Darden Restaurants | PACIFIC ONLINE vs. Reliance Steel Aluminum | PACIFIC ONLINE vs. Q2M Managementberatung AG |
| NEWELL RUBBERMAID vs. Hitachi Construction Machinery | NEWELL RUBBERMAID vs. Sterling Construction | NEWELL RUBBERMAID vs. Titan Machinery | NEWELL RUBBERMAID vs. TITAN MACHINERY |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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