Correlation Between Sealed Air and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Leroy Seafood 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 Sealed Air and Leroy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air Corp and Leroy Seafood Group, you can compare the effects of market volatilities on Sealed Air and Leroy Seafood 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 Sealed Air with a short position of Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Leroy Seafood.
Diversification Opportunities for Sealed Air and Leroy Seafood
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Leroy is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group and Sealed Air 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 Sealed Air Corp are associated (or correlated) with Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of Sealed Air i.e., Sealed Air and Leroy Seafood go up and down completely randomly.
Pair Corralation between Sealed Air and Leroy Seafood
Assuming the 90 days trading horizon Sealed Air is expected to generate 30.41 times less return on investment than Leroy Seafood. In addition to that, Sealed Air is 1.12 times more volatile than Leroy Seafood Group. It trades about 0.0 of its total potential returns per unit of risk. Leroy Seafood Group is currently generating about 0.05 per unit of volatility. If you would invest 4,171 in Leroy Seafood Group on October 6, 2024 and sell it today you would earn a total of 758.00 from holding Leroy Seafood Group or generate 18.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 93.6% |
Values | Daily Returns |
Sealed Air Corp vs. Leroy Seafood Group
Performance |
Timeline |
Sealed Air Corp |
Leroy Seafood Group |
Sealed Air and Leroy Seafood Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sealed Air and Leroy Seafood
The main advantage of trading using opposite Sealed Air and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.Sealed Air vs. European Metals Holdings | Sealed Air vs. Future Metals NL | Sealed Air vs. Qurate Retail Series | Sealed Air vs. URU Metals |
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Check out your portfolio center.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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