Correlation Between Paysafe and Newell Brands
Can any of the company-specific risk be diversified away by investing in both Paysafe and Newell Brands 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 Paysafe and Newell Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paysafe and Newell Brands, you can compare the effects of market volatilities on Paysafe and Newell Brands 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 Paysafe with a short position of Newell Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paysafe and Newell Brands.
Diversification Opportunities for Paysafe and Newell Brands
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Paysafe and Newell is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and Newell Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands and Paysafe 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 Paysafe are associated (or correlated) with Newell Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands has no effect on the direction of Paysafe i.e., Paysafe and Newell Brands go up and down completely randomly.
Pair Corralation between Paysafe and Newell Brands
Given the investment horizon of 90 days Paysafe is expected to under-perform the Newell Brands. In addition to that, Paysafe is 3.37 times more volatile than Newell Brands. It trades about -0.04 of its total potential returns per unit of risk. Newell Brands is currently generating about 0.16 per unit of volatility. If you would invest 897.00 in Newell Brands on August 31, 2024 and sell it today you would earn a total of 59.00 from holding Newell Brands or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paysafe vs. Newell Brands
Performance |
| Timeline |
| Paysafe |
| Newell Brands |
Paysafe and Newell Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paysafe and Newell Brands
The main advantage of trading using opposite Paysafe and Newell Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe position performs unexpectedly, Newell Brands 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 Newell Brands will offset losses from the drop in Newell Brands' long position.| Paysafe vs. Aquagold International | Paysafe vs. Thrivent High Yield | Paysafe vs. Morningstar Unconstrained Allocation | Paysafe vs. Via Renewables |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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