Correlation Between Newell Brands and Nexxen International
Can any of the company-specific risk be diversified away by investing in both Newell Brands and Nexxen International 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 Nexxen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newell Brands and Nexxen International, you can compare the effects of market volatilities on Newell Brands and Nexxen International 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 Nexxen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and Nexxen International.
Diversification Opportunities for Newell Brands and Nexxen International
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Newell and Nexxen is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands and Nexxen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexxen International 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 Nexxen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexxen International has no effect on the direction of Newell Brands i.e., Newell Brands and Nexxen International go up and down completely randomly.
Pair Corralation between Newell Brands and Nexxen International
Considering the 90-day investment horizon Newell Brands is expected to generate 17.51 times less return on investment than Nexxen International. But when comparing it to its historical volatility, Newell Brands is 2.51 times less risky than Nexxen International. It trades about 0.03 of its potential returns per unit of risk. Nexxen International is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Nexxen International on August 27, 2024 and sell it today you would earn a total of 197.00 from holding Nexxen International or generate 24.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newell Brands vs. Nexxen International
Performance |
| Timeline |
| Newell Brands |
| Nexxen International |
Newell Brands and Nexxen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newell Brands and Nexxen International
The main advantage of trading using opposite Newell Brands and Nexxen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands position performs unexpectedly, Nexxen International 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 Nexxen International will offset losses from the drop in Nexxen International's long position.| Newell Brands vs. The Clorox | Newell Brands vs. Colgate Palmolive | Newell Brands vs. Procter Gamble | Newell Brands vs. Unilever PLC ADR |
| Nexxen International vs. Toro Co | Nexxen International vs. Newell Brands | Nexxen International vs. Lincoln Electric Holdings | Nexxen International vs. RBC Bearings Incorporated |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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