Correlation Between European Wax and Newell Brands

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

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

Diversification Opportunities for European Wax and Newell Brands

0.36

Correlation Coefficient

European Wax  Newell Brands

Weak diversification

The 3 months correlation between European and Newell is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding European Wax Center and Newell Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands and European Wax 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 European Wax Center 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 European Wax i.e., European Wax and Newell Brands go up and down completely randomly.

Pair Corralation between European Wax and Newell Brands

Given the investment horizon of 90 days European Wax Center is expected to generate 1.1 times more return on investment than Newell Brands. However, European Wax is 1.1 times more volatile than Newell Brands. It trades about 0.1 of its potential returns per unit of risk. Newell Brands is currently generating about 0.02 per unit of risk. If you would invest  345.00  in European Wax Center on May 7, 2025 and sell it today you would earn a total of  85.00  from holding European Wax Center or generate 24.64% return on investment over 90 days.

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

European Wax Center  vs.  Newell Brands

European Wax Center

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in European Wax Center are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, European Wax showed solid returns over the last few months and may actually be approaching a breakup point.

Newell Brands

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Newell Brands are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Newell Brands is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with European Wax and Newell Brands

The main advantage of trading using opposite European Wax and Newell Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Wax 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 European Wax Center 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.