Correlation Between NEWELL RUBBERMAID and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and Uber Technologies 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 Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and Uber Technologies, you can compare the effects of market volatilities on NEWELL RUBBERMAID and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and Uber Technologies.
Diversification Opportunities for NEWELL RUBBERMAID and Uber Technologies
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NEWELL and Uber is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and Uber Technologies go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and Uber Technologies
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 4.26 times less return on investment than Uber Technologies. In addition to that, NEWELL RUBBERMAID is 1.43 times more volatile than Uber Technologies. It trades about 0.01 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.09 per unit of volatility. If you would invest 2,316 in Uber Technologies on September 14, 2024 and sell it today you would earn a total of 3,603 from holding Uber Technologies or generate 155.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. Uber Technologies
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| Uber Technologies |
NEWELL RUBBERMAID and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and Uber Technologies
The main advantage of trading using opposite NEWELL RUBBERMAID and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc | NEWELL RUBBERMAID vs. Apple Inc |
| Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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