Correlation Between NEWELL RUBBERMAID and NH Foods
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and NH Foods 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 NH Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and NH Foods, you can compare the effects of market volatilities on NEWELL RUBBERMAID and NH Foods 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 NH Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and NH Foods.
Diversification Opportunities for NEWELL RUBBERMAID and NH Foods
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NEWELL and NI6 is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and NH Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Foods 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 NH Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Foods has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and NH Foods go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and NH Foods
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 0.77 times more return on investment than NH Foods. However, NEWELL RUBBERMAID is 1.3 times less risky than NH Foods. It trades about -0.1 of its potential returns per unit of risk. NH Foods is currently generating about -0.19 per unit of risk. 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 |
NEWELL RUBBERMAID vs. NH Foods
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| NH Foods |
NEWELL RUBBERMAID and NH Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and NH Foods
The main advantage of trading using opposite NEWELL RUBBERMAID and NH Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, NH Foods 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 NH Foods will offset losses from the drop in NH Foods' long position.| NEWELL RUBBERMAID vs. INTER CARS SA | NEWELL RUBBERMAID vs. Aegean Airlines SA | NEWELL RUBBERMAID vs. Commercial Vehicle Group | NEWELL RUBBERMAID vs. United Airlines Holdings |
| NH Foods vs. T Mobile | NH Foods vs. Air Lease | NH Foods vs. ecotel communication ag | NH Foods vs. MAVEN WIRELESS SWEDEN |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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