Correlation Between BASF SE and NEWELL RUBBERMAID
Can any of the company-specific risk be diversified away by investing in both BASF SE 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 BASF SE and NEWELL RUBBERMAID into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE and NEWELL RUBBERMAID , you can compare the effects of market volatilities on BASF SE 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 BASF SE with a short position of NEWELL RUBBERMAID. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and NEWELL RUBBERMAID.
Diversification Opportunities for BASF SE and NEWELL RUBBERMAID
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BASF and NEWELL is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID and BASF SE 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 BASF SE 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 BASF SE i.e., BASF SE and NEWELL RUBBERMAID go up and down completely randomly.
Pair Corralation between BASF SE and NEWELL RUBBERMAID
Assuming the 90 days trading horizon BASF SE is expected to generate 0.44 times more return on investment than NEWELL RUBBERMAID. However, BASF SE is 2.25 times less risky than NEWELL RUBBERMAID. It trades about 0.01 of its potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about 0.0 per unit of risk. If you would invest 4,122 in BASF SE on September 3, 2024 and sell it today you would earn a total of 120.00 from holding BASF SE or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BASF SE vs. NEWELL RUBBERMAID
Performance |
| Timeline |
| BASF SE |
| NEWELL RUBBERMAID |
BASF SE and NEWELL RUBBERMAID Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and NEWELL RUBBERMAID
The main advantage of trading using opposite BASF SE and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE 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.| BASF SE vs. HF FOODS GRP | BASF SE vs. TYSON FOODS A | BASF SE vs. PT Indofood Sukses | BASF SE vs. Lifeway Foods |
| NEWELL RUBBERMAID vs. ANTA SPORTS PRODUCT | NEWELL RUBBERMAID vs. EIDESVIK OFFSHORE NK | NEWELL RUBBERMAID vs. SIEM OFFSHORE NEW | NEWELL RUBBERMAID vs. WT OFFSHORE |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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