Correlation Between NEWELL RUBBERMAID and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and FLOW TRADERS 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 FLOW TRADERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and FLOW TRADERS LTD, you can compare the effects of market volatilities on NEWELL RUBBERMAID and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and FLOW TRADERS.
Diversification Opportunities for NEWELL RUBBERMAID and FLOW TRADERS
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEWELL and FLOW is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and FLOW TRADERS go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and FLOW TRADERS
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 2.14 times more return on investment than FLOW TRADERS. However, NEWELL RUBBERMAID is 2.14 times more volatile than FLOW TRADERS LTD. It trades about 0.2 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.1 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. FLOW TRADERS LTD
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| FLOW TRADERS LTD |
NEWELL RUBBERMAID and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and FLOW TRADERS
The main advantage of trading using opposite NEWELL RUBBERMAID and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Microsoft | NEWELL RUBBERMAID vs. Microsoft |
| FLOW TRADERS vs. Macquarie Group Limited | FLOW TRADERS vs. MSCI Inc | FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. NMI Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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