Correlation Between United Parks and Newell Brands

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

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

Diversification Opportunities for United Parks and Newell Brands

0.61

Correlation Coefficient

United Parks  Newell Brands

Poor diversification

The 3 months correlation between United and Newell is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding United Parks Resorts and Newell Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands and United Parks 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 United Parks Resorts 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 United Parks i.e., United Parks and Newell Brands go up and down completely randomly.

Pair Corralation between United Parks and Newell Brands

Given the investment horizon of 90 days United Parks is expected to generate 1.17 times less return on investment than Newell Brands. But when comparing it to its historical volatility, United Parks Resorts is 1.96 times less risky than Newell Brands. It trades about 0.04 of its potential returns per unit of risk. Newell Brands is currently generating about 0.02 of returns per unit of risk over similar time horizon. 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	Significant
Accuracy	100.0%
Values	Daily Returns

United Parks Resorts  vs.  Newell Brands

United Parks Resorts

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in United Parks Resorts are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking signals, United Parks is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 United Parks and Newell Brands

The main advantage of trading using opposite United Parks and Newell Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parks 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 United Parks Resorts 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.