Correlation Between NEWELL RUBBERMAID and CarsalesCom

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Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and CarsalesCom 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 CarsalesCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and CarsalesCom, you can compare the effects of market volatilities on NEWELL RUBBERMAID and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and CarsalesCom.

Diversification Opportunities for NEWELL RUBBERMAID and CarsalesCom

NEWELLCarsalesComDiversified AwayNEWELLCarsalesComDiversified Away100%
-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between NEWELL and CarsalesCom is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and CarsalesCom go up and down completely randomly.

Pair Corralation between NEWELL RUBBERMAID and CarsalesCom

Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to under-perform the CarsalesCom. In addition to that, NEWELL RUBBERMAID is 2.41 times more volatile than CarsalesCom. It trades about -0.08 of its total potential returns per unit of risk. CarsalesCom is currently generating about -0.08 per unit of volatility. If you would invest  2,480  in CarsalesCom on November 22, 2024 and sell it today you would lose (220.00) from holding CarsalesCom or give up 8.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

NEWELL RUBBERMAID   vs.  CarsalesCom

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0204060
JavaScript chart by amCharts 3.21.15NWL WN6
       Timeline  
NEWELL RUBBERMAID 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days NEWELL RUBBERMAID has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.577.588.599.51010.511
CarsalesCom 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CarsalesCom has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb21.52222.52323.52424.52525.5

NEWELL RUBBERMAID and CarsalesCom Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.95-5.21-3.46-1.72-0.0271.593.214.836.44 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15NWL WN6
       Returns  

Pair Trading with NEWELL RUBBERMAID and CarsalesCom

The main advantage of trading using opposite NEWELL RUBBERMAID and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.
The idea behind NEWELL RUBBERMAID and CarsalesCom 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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