Correlation Between NEWELL RUBBERMAID and JD HEALTH

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

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

Diversification Opportunities for NEWELL RUBBERMAID and JD HEALTH

-0.12

Correlation Coefficient

NEWELL RUBBERMAID  JD HEALTH

Good diversification

The 3 months correlation between NEWELL and 8ZN is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL and NEWELL RUBBERMAID 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 RUBBERMAID are associated (or correlated) with JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and JD HEALTH go up and down completely randomly.

Pair Corralation between NEWELL RUBBERMAID and JD HEALTH

Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 1.35 times more return on investment than JD HEALTH. However, NEWELL RUBBERMAID is 1.35 times more volatile than JD HEALTH INTL. It trades about 0.17 of its potential returns per unit of risk. JD HEALTH INTL is currently generating about -0.01 per unit of risk. If you would invest  667.00  in NEWELL RUBBERMAID on October 10, 2024 and sell it today you would earn a total of  303.00  from holding NEWELL RUBBERMAID or generate 45.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NEWELL RUBBERMAID   vs.  JD HEALTH INTL

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 uncertain essential indicators, NEWELL RUBBERMAID unveiled solid returns over the last few months and may actually be approaching a breakup point.

JD HEALTH INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JD HEALTH INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, JD HEALTH is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NEWELL RUBBERMAID and JD HEALTH

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

The idea behind NEWELL RUBBERMAID and JD HEALTH INTL 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.