Correlation Between NewHold Investment and Automatic Data

Can any of the company-specific risk be diversified away by investing in both NewHold Investment and Automatic Data 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 NewHold Investment and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NewHold Investment Corp and Automatic Data Processing, you can compare the effects of market volatilities on NewHold Investment and Automatic Data 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 NewHold Investment with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewHold Investment and Automatic Data.

Diversification Opportunities for NewHold Investment and Automatic Data

-0.93

Correlation Coefficient

NewHold Investment  Automatic Data

Pay attention - limited upside

The 3 months correlation between NewHold and Automatic is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding NewHold Investment Corp and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and NewHold Investment 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 NewHold Investment Corp are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of NewHold Investment i.e., NewHold Investment and Automatic Data go up and down completely randomly.

Pair Corralation between NewHold Investment and Automatic Data

Given the investment horizon of 90 days NewHold Investment Corp is expected to generate 0.18 times more return on investment than Automatic Data. However, NewHold Investment Corp is 5.63 times less risky than Automatic Data. It trades about 0.14 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.09 per unit of risk. If you would invest  1,016  in NewHold Investment Corp on September 16, 2025 and sell it today you would earn a total of  20.00  from holding NewHold Investment Corp or generate 1.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

NewHold Investment Corp  vs.  Automatic Data Processing

NewHold Investment Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NewHold Investment Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, NewHold Investment is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Automatic Data Processing

Risk-Adjusted Performance

Weakest

Over the last 90 days Automatic Data Processing has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with NewHold Investment and Automatic Data

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

The idea behind NewHold Investment Corp and Automatic Data Processing 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.