Correlation Between Newell Brands and 26442EAE0

Can any of the company-specific risk be diversified away by investing in both Newell Brands and 26442EAE0 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 Brands and 26442EAE0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Newell Brands and DUKE ENERGY OHIO, you can compare the effects of market volatilities on Newell Brands and 26442EAE0 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 Brands with a short position of 26442EAE0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and 26442EAE0.

Diversification Opportunities for Newell Brands and 26442EAE0

0.23

Correlation Coefficient

Newell Brands  26442EAE0

Modest diversification

The 3 months correlation between Newell and 26442EAE0 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands and DUKE ENERGY OHIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY OHIO and Newell Brands 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 Brands are associated (or correlated) with 26442EAE0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY OHIO has no effect on the direction of Newell Brands i.e., Newell Brands and 26442EAE0 go up and down completely randomly.

Pair Corralation between Newell Brands and 26442EAE0

Considering the 90-day investment horizon Newell Brands is expected to generate 1.14 times more return on investment than 26442EAE0. However, Newell Brands is 1.14 times more volatile than DUKE ENERGY OHIO. It trades about 0.09 of its potential returns per unit of risk. DUKE ENERGY OHIO is currently generating about 0.06 per unit of risk. If you would invest  946.00  in Newell Brands on October 26, 2024 and sell it today you would earn a total of  120.00  from holding Newell Brands or generate 12.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	36.67%
Values	Daily Returns

Newell Brands  vs.  DUKE ENERGY OHIO

Newell Brands

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Newell Brands are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Newell Brands disclosed solid returns over the last few months and may actually be approaching a breakup point.

DUKE ENERGY OHIO

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY OHIO are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, 26442EAE0 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Newell Brands and 26442EAE0

The main advantage of trading using opposite Newell Brands and 26442EAE0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands position performs unexpectedly, 26442EAE0 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 26442EAE0 will offset losses from the drop in 26442EAE0's long position.

The idea behind Newell Brands and DUKE ENERGY OHIO 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 Transaction History module to view history of all your transactions and understand their impact on performance.