Correlation Between NEWELL RUBBERMAID and MOLSON RS
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and MOLSON RS 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 MOLSON RS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on NEWELL RUBBERMAID and MOLSON RS 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 MOLSON RS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and MOLSON RS.
Diversification Opportunities for NEWELL RUBBERMAID and MOLSON RS
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NEWELL and MOLSON is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON RS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and MOLSON RS go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and MOLSON RS
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 1.3 times more return on investment than MOLSON RS. However, NEWELL RUBBERMAID is 1.3 times more volatile than MOLSON RS BEVERAGE. It trades about 0.0 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about -0.01 per unit of risk. If you would invest 1,298 in NEWELL RUBBERMAID on October 30, 2024 and sell it today you would lose (294.00) from holding NEWELL RUBBERMAID or give up 22.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| MOLSON RS BEVERAGE |
NEWELL RUBBERMAID and MOLSON RS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and MOLSON RS
The main advantage of trading using opposite NEWELL RUBBERMAID and MOLSON RS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, MOLSON RS 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 MOLSON RS will offset losses from the drop in MOLSON RS's long position.| NEWELL RUBBERMAID vs. Micron Technology | NEWELL RUBBERMAID vs. MOVIE GAMES SA | NEWELL RUBBERMAID vs. PLAYMATES TOYS | NEWELL RUBBERMAID vs. Computershare Limited |
| MOLSON RS vs. CARDINAL HEALTH | MOLSON RS vs. Siemens Healthineers AG | MOLSON RS vs. REVO INSURANCE SPA | MOLSON RS vs. Chiba Bank |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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