Correlation Between Newell Brands and Tupperware Corp

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Can any of the company-specific risk be diversified away by investing in both Newell Brands and Tupperware Corp 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 Tupperware Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newell Brands and Tupperware Corp, you can compare the effects of market volatilities on Newell Brands and Tupperware Corp 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 Tupperware Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and Tupperware Corp.

Diversification Opportunities for Newell Brands and Tupperware Corp

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between Newell and Tupperware is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands Inc and Tupperware Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tupperware Corp 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 Tupperware Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tupperware Corp has no effect on the direction of Newell Brands i.e., Newell Brands and Tupperware Corp go up and down completely randomly.

Pair Corralation between Newell Brands and Tupperware Corp

Considering the 90-day investment horizon Newell Brands is expected to generate 0.44 times more return on investment than Tupperware Corp. However, Newell Brands is 2.3 times less risky than Tupperware Corp. It trades about 0.04 of its potential returns per unit of risk. Tupperware Corp is currently generating about 0.01 per unit of risk. If you would invest  1,492  in Newell Brands on May 21, 2022 and sell it today you would earn a total of  584.00  from holding Newell Brands or generate 39.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Newell Brands Inc  vs.  Tupperware Corp

 Performance (%) 
       Timeline  
Newell Brands 
Newell Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Newell Brands are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Newell Brands may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Newell Price Channel

Tupperware Corp 
Tupperware Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Tupperware Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Tupperware Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Tupperware Price Channel

Newell Brands and Tupperware Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Newell Brands and Tupperware Corp

The main advantage of trading using opposite Newell Brands and Tupperware Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands position performs unexpectedly, Tupperware Corp 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 Tupperware Corp will offset losses from the drop in Tupperware Corp's long position.
The idea behind Newell Brands and Tupperware Corp 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.
Check out your portfolio center. 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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