Correlation Between NEWELL RUBBERMAID and US FOODS
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and US 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 US 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 US FOODS HOLDING, you can compare the effects of market volatilities on NEWELL RUBBERMAID and US 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 US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and US FOODS.
Diversification Opportunities for NEWELL RUBBERMAID and US FOODS
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NEWELL and UFH is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING 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 FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and US FOODS go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and US FOODS
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 15.48 times less return on investment than US FOODS. In addition to that, NEWELL RUBBERMAID is 2.42 times more volatile than US FOODS HOLDING. It trades about 0.0 of its total potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.1 per unit of volatility. If you would invest 3,460 in US FOODS HOLDING on November 6, 2024 and sell it today you would earn a total of 3,390 from holding US FOODS HOLDING or generate 97.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. US FOODS HOLDING
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| US FOODS HOLDING |
NEWELL RUBBERMAID and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and US FOODS
The main advantage of trading using opposite NEWELL RUBBERMAID and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, US 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 US FOODS will offset losses from the drop in US 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 |
| US FOODS vs. Amkor Technology | US FOODS vs. VELA TECHNOLPLC LS 0001 | US FOODS vs. TAL Education Group | US FOODS vs. G8 EDUCATION |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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