Correlation Between NEWELL RUBBERMAID and SILICON LABORATOR
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and SILICON LABORATOR 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 SILICON LABORATOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and SILICON LABORATOR, you can compare the effects of market volatilities on NEWELL RUBBERMAID and SILICON LABORATOR 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 SILICON LABORATOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and SILICON LABORATOR.
Diversification Opportunities for NEWELL RUBBERMAID and SILICON LABORATOR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEWELL and SILICON is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and SILICON LABORATOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILICON LABORATOR 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 SILICON LABORATOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILICON LABORATOR has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and SILICON LABORATOR go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and SILICON LABORATOR
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 31.45 times less return on investment than SILICON LABORATOR. In addition to that, NEWELL RUBBERMAID is 1.38 times more volatile than SILICON LABORATOR. It trades about 0.01 of its total potential returns per unit of risk. SILICON LABORATOR is currently generating about 0.34 per unit of volatility. If you would invest 10,900 in SILICON LABORATOR on October 10, 2024 and sell it today you would earn a total of 1,600 from holding SILICON LABORATOR or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. SILICON LABORATOR
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| SILICON LABORATOR |
NEWELL RUBBERMAID and SILICON LABORATOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and SILICON LABORATOR
The main advantage of trading using opposite NEWELL RUBBERMAID and SILICON LABORATOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, SILICON LABORATOR 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 SILICON LABORATOR will offset losses from the drop in SILICON LABORATOR's long position.| NEWELL RUBBERMAID vs. Playtech plc | NEWELL RUBBERMAID vs. The Home Depot | NEWELL RUBBERMAID vs. 24SEVENOFFICE GROUP AB | NEWELL RUBBERMAID vs. KENEDIX OFFICE INV |
| SILICON LABORATOR vs. PLAYMATES TOYS | SILICON LABORATOR vs. Media and Games | SILICON LABORATOR vs. Universal Insurance Holdings | SILICON LABORATOR vs. GAMESTOP |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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