Correlation Between CODERE ONLINE and NEWELL RUBBERMAID

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

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

Diversification Opportunities for CODERE ONLINE and NEWELL RUBBERMAID

-0.34

Correlation Coefficient

CODERE ONLINE  NEWELL RUBBERMAID

Very good diversification

The 3 months correlation between CODERE and NEWELL is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CODERE ONLINE LUX and NEWELL RUBBERMAID in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL RUBBERMAID and CODERE ONLINE 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 CODERE ONLINE LUX 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 CODERE ONLINE i.e., CODERE ONLINE and NEWELL RUBBERMAID go up and down completely randomly.

Pair Corralation between CODERE ONLINE and NEWELL RUBBERMAID

Assuming the 90 days horizon CODERE ONLINE LUX is expected to under-perform the NEWELL RUBBERMAID. But the stock apears to be less risky and, when comparing its historical volatility, CODERE ONLINE LUX is 1.44 times less risky than NEWELL RUBBERMAID. The stock trades about -0.04 of its potential returns per unit of risk. The NEWELL RUBBERMAID is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  652.00  in NEWELL RUBBERMAID on September 19, 2024 and sell it today you would earn a total of  370.00  from holding NEWELL RUBBERMAID or generate 56.75% return on investment over 90 days.

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

CODERE ONLINE LUX  vs.  NEWELL RUBBERMAID

CODERE ONLINE LUX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CODERE ONLINE LUX 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.

NEWELL RUBBERMAID

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NEWELL RUBBERMAID are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, NEWELL RUBBERMAID unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CODERE ONLINE and NEWELL RUBBERMAID

The main advantage of trading using opposite CODERE ONLINE and NEWELL RUBBERMAID positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CODERE ONLINE 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 CODERE ONLINE LUX 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.