Correlation Between Spectrum Brands and United Parks

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

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

Diversification Opportunities for Spectrum Brands and United Parks

0.33

Correlation Coefficient

Spectrum Brands  United Parks

Weak diversification

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

Pair Corralation between Spectrum Brands and United Parks

Considering the 90-day investment horizon Spectrum Brands Holdings is expected to under-perform the United Parks. In addition to that, Spectrum Brands is 1.08 times more volatile than United Parks Resorts. It trades about -0.12 of its total potential returns per unit of risk. United Parks Resorts is currently generating about 0.02 per unit of volatility. If you would invest  4,598  in United Parks Resorts on May 4, 2025 and sell it today you would earn a total of  65.00  from holding United Parks Resorts or generate 1.41% return on investment over 90 days.

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

Spectrum Brands Holdings  vs.  United Parks Resorts

Spectrum Brands Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spectrum Brands Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

United Parks Resorts

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United Parks Resorts are ranked lower than 1 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Spectrum Brands and United Parks

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

The idea behind Spectrum Brands Holdings and United Parks Resorts 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.