Correlation Between NEWELL RUBBERMAID and Onxeo SA
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and Onxeo SA 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 NEWELL RUBBERMAID and Onxeo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and Onxeo SA, you can compare the effects of market volatilities on NEWELL RUBBERMAID and Onxeo SA 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 NEWELL RUBBERMAID with a short position of Onxeo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and Onxeo SA.
Diversification Opportunities for NEWELL RUBBERMAID and Onxeo SA
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NEWELL and Onxeo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and Onxeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onxeo SA and NEWELL RUBBERMAID 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 NEWELL RUBBERMAID are associated (or correlated) with Onxeo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onxeo SA has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and Onxeo SA go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and Onxeo SA
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 4.26 times less return on investment than Onxeo SA. But when comparing it to its historical volatility, NEWELL RUBBERMAID is 10.2 times less risky than Onxeo SA. It trades about 0.15 of its potential returns per unit of risk. Onxeo SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7.83 in Onxeo SA on October 22, 2024 and sell it today you would earn a total of 0.18 from holding Onxeo SA or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. Onxeo SA
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| Onxeo SA |
NEWELL RUBBERMAID and Onxeo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and Onxeo SA
The main advantage of trading using opposite NEWELL RUBBERMAID and Onxeo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, Onxeo SA 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 Onxeo SA will offset losses from the drop in Onxeo SA's long position.| NEWELL RUBBERMAID vs. PLAYTIKA HOLDING DL 01 | NEWELL RUBBERMAID vs. Fevertree Drinks PLC | NEWELL RUBBERMAID vs. Aristocrat Leisure Limited | NEWELL RUBBERMAID vs. ARISTOCRAT LEISURE |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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