Correlation Between Newell Brands and United Guardian

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

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

Diversification Opportunities for Newell Brands and United Guardian

0.35

Correlation Coefficient

Newell Brands  United Guardian

Weak diversification

The 3 months correlation between Newell and United is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands and United Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Guardian 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 United Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Guardian has no effect on the direction of Newell Brands i.e., Newell Brands and United Guardian go up and down completely randomly.

Pair Corralation between Newell Brands and United Guardian

Considering the 90-day investment horizon Newell Brands is expected to generate 1.67 times more return on investment than United Guardian. However, Newell Brands is 1.67 times more volatile than United Guardian. It trades about 0.02 of its potential returns per unit of risk. United Guardian is currently generating about 0.04 per unit of risk. If you would invest  494.00  in Newell Brands on May 7, 2025 and sell it today you would earn a total of  3.00  from holding Newell Brands or generate 0.61% return on investment over 90 days.

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

Newell Brands  vs.  United Guardian

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.

United Guardian

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United Guardian are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, United Guardian is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Newell Brands and United Guardian

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

The idea behind Newell Brands and United Guardian 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.