Correlation Between Newell Brands and Weyco
Can any of the company-specific risk be diversified away by investing in both Newell Brands and Weyco 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 Weyco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newell Brands and Weyco Group, you can compare the effects of market volatilities on Newell Brands and Weyco 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 Weyco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and Weyco.
Diversification Opportunities for Newell Brands and Weyco
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newell and Weyco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco Group 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Newell Brands i.e., Newell Brands and Weyco go up and down completely randomly.
Pair Corralation between Newell Brands and Weyco
Considering the 90-day investment horizon Newell Brands is expected to generate 1.32 times more return on investment than Weyco. However, Newell Brands is 1.32 times more volatile than Weyco Group. It trades about 0.0 of its potential returns per unit of risk. Weyco Group is currently generating about -0.02 per unit of risk. If you would invest 998.00 in Newell Brands on November 3, 2024 and sell it today you would lose (2.00) from holding Newell Brands or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newell Brands vs. Weyco Group
Performance |
| Timeline |
| Newell Brands |
| Weyco Group |
Newell Brands and Weyco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newell Brands and Weyco
The main advantage of trading using opposite Newell Brands and Weyco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands position performs unexpectedly, Weyco 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 Weyco will offset losses from the drop in Weyco's long position.| Newell Brands vs. The Clorox | Newell Brands vs. Colgate Palmolive | Newell Brands vs. Procter Gamble | Newell Brands vs. Unilever PLC ADR |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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