Correlation Between THORNEY TECHS and NEWELL RUBBERMAID

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

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

Diversification Opportunities for THORNEY TECHS and NEWELL RUBBERMAID

0.58

Correlation Coefficient

THORNEY TECHS  NEWELL RUBBERMAID

Very weak diversification

The 3 months correlation between THORNEY and NEWELL is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding THORNEY TECHS LTD and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID and THORNEY TECHS 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 THORNEY TECHS LTD 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 THORNEY TECHS i.e., THORNEY TECHS and NEWELL RUBBERMAID go up and down completely randomly.

Pair Corralation between THORNEY TECHS and NEWELL RUBBERMAID

Assuming the 90 days horizon THORNEY TECHS LTD is expected to generate 1.05 times more return on investment than NEWELL RUBBERMAID. However, THORNEY TECHS is 1.05 times more volatile than NEWELL RUBBERMAID . It trades about 0.01 of its potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about -0.18 per unit of risk. If you would invest  7.00  in THORNEY TECHS LTD on December 30, 2024 and sell it today you would lose (0.20) from holding THORNEY TECHS LTD or give up 2.86% of portfolio value over 90 days.

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

THORNEY TECHS LTD  vs.  NEWELL RUBBERMAID

THORNEY TECHS LTD

Risk-Adjusted Performance

Very Weak

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

NEWELL RUBBERMAID

Risk-Adjusted Performance

Very Weak

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

Pair Trading with THORNEY TECHS and NEWELL RUBBERMAID

The main advantage of trading using opposite THORNEY TECHS and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THORNEY TECHS 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 THORNEY TECHS LTD 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.