Correlation Between Newell Brands and Marchex
Can any of the company-specific risk be diversified away by investing in both Newell Brands and Marchex 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 Brands and Marchex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newell Brands and Marchex, you can compare the effects of market volatilities on Newell Brands and Marchex 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 Brands with a short position of Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and Marchex.
Diversification Opportunities for Newell Brands and Marchex
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newell and Marchex is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex and Newell Brands 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 Brands are associated (or correlated) with Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of Newell Brands i.e., Newell Brands and Marchex go up and down completely randomly.
Pair Corralation between Newell Brands and Marchex
Considering the 90-day investment horizon Newell Brands is expected to generate 1.04 times more return on investment than Marchex. However, Newell Brands is 1.04 times more volatile than Marchex. It trades about 0.03 of its potential returns per unit of risk. Marchex is currently generating about 0.01 per unit of risk. If you would invest 825.00 in Newell Brands on August 31, 2024 and sell it today you would earn a total of 134.00 from holding Newell Brands or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newell Brands vs. Marchex
Performance |
| Timeline |
| Newell Brands |
| Marchex |
Newell Brands and Marchex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newell Brands and Marchex
The main advantage of trading using opposite Newell Brands and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands position performs unexpectedly, Marchex 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 Marchex will offset losses from the drop in Marchex's long position.| Newell Brands vs. The Clorox | Newell Brands vs. Colgate Palmolive | Newell Brands vs. Procter Gamble | Newell Brands vs. Unilever PLC ADR |
| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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