Correlation Between Newell Brands and Tupperware Brands

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Can any of the company-specific risk be diversified away by investing in both Newell Brands and Tupperware 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 Newell Brands and Tupperware Brands 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 Brands, you can compare the effects of market volatilities on Newell Brands and Tupperware 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 Newell Brands with a short position of Tupperware Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newell Brands and Tupperware Brands.

Diversification Opportunities for Newell Brands and Tupperware Brands

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Newell and Tupperware is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Newell Brands and Tupperware Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tupperware Brands 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 Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tupperware Brands has no effect on the direction of Newell Brands i.e., Newell Brands and Tupperware Brands go up and down completely randomly.

Pair Corralation between Newell Brands and Tupperware Brands

Considering the 90-day investment horizon Newell Brands is expected to generate 0.75 times more return on investment than Tupperware Brands. However, Newell Brands is 1.34 times less risky than Tupperware Brands. It trades about 0.13 of its potential returns per unit of risk. Tupperware Brands is currently generating about 0.08 per unit of risk. If you would invest  729.00  in Newell Brands on December 29, 2023 and sell it today you would earn a total of  58.00  from holding Newell Brands or generate 7.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.65%
ValuesDaily Returns

Newell Brands  vs.  Tupperware Brands

 Performance 
       Timeline  
Newell Brands 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Newell Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Newell Brands is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Tupperware Brands 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Tupperware Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Newell Brands and Tupperware Brands Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Newell Brands and Tupperware Brands

The main advantage of trading using opposite Newell Brands and Tupperware Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newell Brands position performs unexpectedly, Tupperware 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 Tupperware Brands will offset losses from the drop in Tupperware Brands' long position.
The idea behind Newell Brands and Tupperware 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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