Correlation Between NEWELL RUBBERMAID and US Bancorp
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and US Bancorp 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 US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and US Bancorp, you can compare the effects of market volatilities on NEWELL RUBBERMAID and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and US Bancorp.
Diversification Opportunities for NEWELL RUBBERMAID and US Bancorp
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NEWELL and UB5 is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and US Bancorp go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and US Bancorp
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 0.87 times more return on investment than US Bancorp. However, NEWELL RUBBERMAID is 1.14 times less risky than US Bancorp. It trades about 0.34 of its potential returns per unit of risk. US Bancorp is currently generating about 0.27 per unit of risk. If you would invest 794.00 in NEWELL RUBBERMAID on September 5, 2024 and sell it today you would earn a total of 129.00 from holding NEWELL RUBBERMAID or generate 16.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. US Bancorp
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| US Bancorp |
NEWELL RUBBERMAID and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and US Bancorp
The main advantage of trading using opposite NEWELL RUBBERMAID and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| NEWELL RUBBERMAID vs. TOTAL GABON | NEWELL RUBBERMAID vs. Walgreens Boots Alliance | NEWELL RUBBERMAID vs. Peak Resources Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |