Correlation Between AstraZeneca PLC and NEWELL RUBBERMAID

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

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

Diversification Opportunities for AstraZeneca PLC and NEWELL RUBBERMAID

-0.82

Correlation Coefficient

AstraZeneca PLC  NEWELL RUBBERMAID

Pay attention - limited upside

The 3 months correlation between AstraZeneca and NEWELL is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID and AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC i.e., AstraZeneca PLC and NEWELL RUBBERMAID go up and down completely randomly.

Pair Corralation between AstraZeneca PLC and NEWELL RUBBERMAID

Assuming the 90 days trading horizon AstraZeneca PLC is expected to generate 0.36 times more return on investment than NEWELL RUBBERMAID. However, AstraZeneca PLC is 2.81 times less risky than NEWELL RUBBERMAID. It trades about 0.1 of its potential returns per unit of risk. NEWELL RUBBERMAID is currently generating about -0.17 per unit of risk. If you would invest  12,547  in AstraZeneca PLC on December 26, 2024 and sell it today you would earn a total of  1,063  from holding AstraZeneca PLC or generate 8.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

AstraZeneca PLC  vs.  NEWELL RUBBERMAID

AstraZeneca PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AstraZeneca PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, AstraZeneca PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 AstraZeneca PLC and NEWELL RUBBERMAID

The main advantage of trading using opposite AstraZeneca PLC and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC 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 AstraZeneca PLC 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.