Correlation Between NEWELL RUBBERMAID and PATTIES FOODS
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and PATTIES 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 PATTIES 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 PATTIES FOODS , you can compare the effects of market volatilities on NEWELL RUBBERMAID and PATTIES 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 PATTIES FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and PATTIES FOODS.
Diversification Opportunities for NEWELL RUBBERMAID and PATTIES FOODS
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NEWELL and PATTIES is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and PATTIES FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATTIES 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 PATTIES FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATTIES FOODS has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and PATTIES FOODS go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and PATTIES FOODS
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to under-perform the PATTIES FOODS. But the stock apears to be less risky and, when comparing its historical volatility, NEWELL RUBBERMAID is 1.59 times less risky than PATTIES FOODS. The stock trades about -0.1 of its potential returns per unit of risk. The PATTIES FOODS is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 29.00 in PATTIES FOODS on November 7, 2024 and sell it today you would lose (1.00) from holding PATTIES FOODS or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. PATTIES FOODS
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| PATTIES FOODS |
NEWELL RUBBERMAID and PATTIES FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and PATTIES FOODS
The main advantage of trading using opposite NEWELL RUBBERMAID and PATTIES FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, PATTIES 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 PATTIES FOODS will offset losses from the drop in PATTIES FOODS's 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 |
| PATTIES FOODS vs. Perseus Mining Limited | PATTIES FOODS vs. STGEORGE MINING LTD | PATTIES FOODS vs. PennyMac Mortgage Investment | PATTIES FOODS vs. MCEWEN MINING 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |