Correlation Between Inchcape Plc and NEWELL RUBBERMAID
Can any of the company-specific risk be diversified away by investing in both Inchcape Plc 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 Inchcape Plc and NEWELL RUBBERMAID into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inchcape plc and NEWELL RUBBERMAID , you can compare the effects of market volatilities on Inchcape Plc 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 Inchcape Plc with a short position of NEWELL RUBBERMAID. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inchcape Plc and NEWELL RUBBERMAID.
Diversification Opportunities for Inchcape Plc and NEWELL RUBBERMAID
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inchcape and NEWELL is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Inchcape plc and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID and Inchcape Plc 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 Inchcape plc 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 Inchcape Plc i.e., Inchcape Plc and NEWELL RUBBERMAID go up and down completely randomly.
Pair Corralation between Inchcape Plc and NEWELL RUBBERMAID
Assuming the 90 days trading horizon Inchcape plc is expected to under-perform the NEWELL RUBBERMAID. In addition to that, Inchcape Plc is 2.96 times more volatile than NEWELL RUBBERMAID . It trades about -0.28 of its total potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about 0.09 per unit of volatility. If you would invest 970.00 in NEWELL RUBBERMAID on October 28, 2024 and sell it today you would earn a total of 18.00 from holding NEWELL RUBBERMAID or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inchcape plc vs. NEWELL RUBBERMAID
Performance |
| Timeline |
| Inchcape plc |
| NEWELL RUBBERMAID |
Inchcape Plc and NEWELL RUBBERMAID Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inchcape Plc and NEWELL RUBBERMAID
The main advantage of trading using opposite Inchcape Plc and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inchcape Plc 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.| Inchcape Plc vs. Coffee Holding Co | Inchcape Plc vs. TYSON FOODS A | Inchcape Plc vs. Thai Beverage Public | Inchcape Plc vs. High Liner Foods |
| NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc |
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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