Correlation Between NEWELL RUBBERMAID and National Retail
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and National Retail 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 National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and National Retail Properties, you can compare the effects of market volatilities on NEWELL RUBBERMAID and National Retail 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 National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and National Retail.
Diversification Opportunities for NEWELL RUBBERMAID and National Retail
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEWELL and National is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop 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 National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and National Retail go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and National Retail
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 1.17 times more return on investment than National Retail. However, NEWELL RUBBERMAID is 1.17 times more volatile than National Retail Properties. It trades about 0.2 of its potential returns per unit of risk. National Retail Properties is currently generating about -0.02 per unit of risk. If you would invest 820.00 in NEWELL RUBBERMAID on August 29, 2024 and sell it today you would earn a total of 92.00 from holding NEWELL RUBBERMAID or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. National Retail Properties
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| National Retail Prop |
NEWELL RUBBERMAID and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and National Retail
The main advantage of trading using opposite NEWELL RUBBERMAID and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.| NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Microsoft | NEWELL RUBBERMAID vs. Microsoft |
| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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