Correlation Between NEWELL RUBBERMAID and FedEx

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

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

Diversification Opportunities for NEWELL RUBBERMAID and FedEx

0.53

Correlation Coefficient

NEWELL RUBBERMAID  FedEx

Very weak diversification

The 3 months correlation between NEWELL and FedEx is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and FedEx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedEx 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 FedEx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedEx has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and FedEx go up and down completely randomly.

Pair Corralation between NEWELL RUBBERMAID and FedEx

Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 1.49 times less return on investment than FedEx. But when comparing it to its historical volatility, NEWELL RUBBERMAID is 1.03 times less risky than FedEx. It trades about 0.11 of its potential returns per unit of risk. FedEx is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  25,885  in FedEx on October 23, 2024 and sell it today you would earn a total of  830.00  from holding FedEx or generate 3.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

NEWELL RUBBERMAID   vs.  FedEx

NEWELL RUBBERMAID

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NEWELL RUBBERMAID are ranked lower than 12 (%) 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.

FedEx

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FedEx may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NEWELL RUBBERMAID and FedEx

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

The idea behind NEWELL RUBBERMAID and FedEx 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.