Correlation Between Newell Brands and Usio

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Can any of the company-specific risk be diversified away by investing in both Newell Brands and Usio 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 Usio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newell Brands and Usio Inc, you can compare the effects of market volatilities on Newell Brands and Usio 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 Usio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and Usio.

Diversification Opportunities for Newell Brands and Usio

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Newell and Usio is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio Inc 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 Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of Newell Brands i.e., Newell Brands and Usio go up and down completely randomly.

Pair Corralation between Newell Brands and Usio

Considering the 90-day investment horizon Newell Brands is expected to generate 1.1 times more return on investment than Usio. However, Newell Brands is 1.1 times more volatile than Usio Inc. It trades about 0.32 of its potential returns per unit of risk. Usio Inc is currently generating about -0.01 per unit of risk. If you would invest  925.00  in Newell Brands on September 12, 2024 and sell it today you would earn a total of  218.00  from holding Newell Brands or generate 23.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Newell Brands  vs.  Usio Inc

 Performance 
       Timeline  
Newell Brands 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Newell Brands are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Newell Brands disclosed solid returns over the last few months and may actually be approaching a breakup point.
Usio Inc 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Usio Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Newell Brands and Usio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Newell Brands and Usio

The main advantage of trading using opposite Newell Brands and Usio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands position performs unexpectedly, Usio 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 Usio will offset losses from the drop in Usio's long position.
The idea behind Newell Brands and Usio Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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