Correlation Between QUEEN S and NEWELL RUBBERMAID

Can any of the company-specific risk be diversified away by investing in both QUEEN S and NEWELL RUBBERMAID 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 QUEEN S and NEWELL RUBBERMAID into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between QUEEN S ROAD and NEWELL RUBBERMAID , you can compare the effects of market volatilities on QUEEN S and NEWELL RUBBERMAID 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 QUEEN S with a short position of NEWELL RUBBERMAID. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and NEWELL RUBBERMAID.

Diversification Opportunities for QUEEN S and NEWELL RUBBERMAID

0.3

Correlation Coefficient

QUEEN S  NEWELL RUBBERMAID

Weak diversification

The 3 months correlation between QUEEN and NEWELL is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID and QUEEN S 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 QUEEN S ROAD are associated (or correlated) with NEWELL RUBBERMAID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL RUBBERMAID has no effect on the direction of QUEEN S i.e., QUEEN S and NEWELL RUBBERMAID go up and down completely randomly.

Pair Corralation between QUEEN S and NEWELL RUBBERMAID

Assuming the 90 days horizon QUEEN S ROAD is expected to under-perform the NEWELL RUBBERMAID. In addition to that, QUEEN S is 1.7 times more volatile than NEWELL RUBBERMAID . It trades about -0.03 of its total potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about 0.14 per unit of volatility. If you would invest  894.00  in NEWELL RUBBERMAID on September 29, 2024 and sell it today you would earn a total of  76.00  from holding NEWELL RUBBERMAID or generate 8.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

QUEEN S ROAD  vs.  NEWELL RUBBERMAID

QUEEN S ROAD

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QUEEN S ROAD are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QUEEN S may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NEWELL RUBBERMAID

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NEWELL RUBBERMAID are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, NEWELL RUBBERMAID unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QUEEN S and NEWELL RUBBERMAID

The main advantage of trading using opposite QUEEN S and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S position performs unexpectedly, NEWELL RUBBERMAID 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 RUBBERMAID will offset losses from the drop in NEWELL RUBBERMAID's long position.

The idea behind QUEEN S ROAD and NEWELL RUBBERMAID 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.