Correlation Between Sealed Air and Fulcrum Metals

Can any of the company-specific risk be diversified away by investing in both Sealed Air and Fulcrum Metals 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 Fulcrum Metals 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 Fulcrum Metals PLC, you can compare the effects of market volatilities on Sealed Air and Fulcrum Metals 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 Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Fulcrum Metals.

Diversification Opportunities for Sealed Air and Fulcrum Metals

-0.46

Correlation Coefficient

Sealed Air  Fulcrum Metals

Very good diversification

The 3 months correlation between Sealed and Fulcrum is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals PLC 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 Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Sealed Air i.e., Sealed Air and Fulcrum Metals go up and down completely randomly.

Pair Corralation between Sealed Air and Fulcrum Metals

Assuming the 90 days trading horizon Sealed Air Corp is expected to under-perform the Fulcrum Metals. In addition to that, Sealed Air is 1.57 times more volatile than Fulcrum Metals PLC. It trades about -0.02 of its total potential returns per unit of risk. Fulcrum Metals PLC is currently generating about 0.2 per unit of volatility. If you would invest  788.00  in Fulcrum Metals PLC on December 5, 2024 and sell it today you would earn a total of  87.00  from holding Fulcrum Metals PLC or generate 11.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.1%
Values	Daily Returns

Sealed Air Corp  vs.  Fulcrum Metals PLC

Sealed Air Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sealed Air Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Fulcrum Metals PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fulcrum Metals PLC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Fulcrum Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sealed Air and Fulcrum Metals

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

The idea behind Sealed Air Corp and Fulcrum Metals PLC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.