Correlation Between Yatsen Holding and Newell Brands

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

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

Diversification Opportunities for Yatsen Holding and Newell Brands

-0.36

Correlation Coefficient

Yatsen Holding  Newell Brands

Very good diversification

The 3 months correlation between Yatsen and Newell is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Yatsen Holding and Newell Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands and Yatsen Holding 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 Yatsen Holding are associated (or correlated) with Newell Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands has no effect on the direction of Yatsen Holding i.e., Yatsen Holding and Newell Brands go up and down completely randomly.

Pair Corralation between Yatsen Holding and Newell Brands

Considering the 90-day investment horizon Yatsen Holding is expected to generate 1.42 times more return on investment than Newell Brands. However, Yatsen Holding is 1.42 times more volatile than Newell Brands. It trades about 0.11 of its potential returns per unit of risk. Newell Brands is currently generating about -0.15 per unit of risk. If you would invest  410.00  in Yatsen Holding on December 28, 2024 and sell it today you would earn a total of  141.00  from holding Yatsen Holding or generate 34.39% return on investment over 90 days.

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

Yatsen Holding  vs.  Newell Brands

Yatsen Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yatsen Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Yatsen Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Newell Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Newell Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Yatsen Holding and Newell Brands

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

The idea behind Yatsen Holding and Newell Brands 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.