Correlation Between NH Foods and NEWELL RUBBERMAID
Can any of the company-specific risk be diversified away by investing in both NH Foods 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 NH Foods and NEWELL RUBBERMAID into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods and NEWELL RUBBERMAID , you can compare the effects of market volatilities on NH Foods 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 NH Foods with a short position of NEWELL RUBBERMAID. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and NEWELL RUBBERMAID.
Diversification Opportunities for NH Foods and NEWELL RUBBERMAID
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NI6 and NEWELL is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID and NH Foods 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 NH Foods 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 NH Foods i.e., NH Foods and NEWELL RUBBERMAID go up and down completely randomly.
Pair Corralation between NH Foods and NEWELL RUBBERMAID
Assuming the 90 days horizon NH Foods is expected to under-perform the NEWELL RUBBERMAID. In addition to that, NH Foods is 1.3 times more volatile than NEWELL RUBBERMAID . It trades about -0.19 of its total potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about -0.1 per unit of volatility. If you would invest 961.00 in NEWELL RUBBERMAID on November 7, 2024 and sell it today you would lose (36.00) from holding NEWELL RUBBERMAID or give up 3.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Foods vs. NEWELL RUBBERMAID
Performance |
| Timeline |
| NH Foods |
| NEWELL RUBBERMAID |
NH Foods and NEWELL RUBBERMAID Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and NEWELL RUBBERMAID
The main advantage of trading using opposite NH Foods and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods 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.| NH Foods vs. T Mobile | NH Foods vs. Air Lease | NH Foods vs. ecotel communication ag | NH Foods vs. MAVEN WIRELESS SWEDEN |
| NEWELL RUBBERMAID vs. INTER CARS SA | NEWELL RUBBERMAID vs. Aegean Airlines SA | NEWELL RUBBERMAID vs. Commercial Vehicle Group | NEWELL RUBBERMAID vs. United Airlines Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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