Correlation Between Sealed Air and Seraphim Space

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

Diversification Opportunities for Sealed Air and Seraphim Space

0.01

Correlation Coefficient

Sealed Air  Seraphim Space

Significant diversification

The 3 months correlation between Sealed and Seraphim is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Seraphim Space Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seraphim Space Investment 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 Seraphim Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seraphim Space Investment has no effect on the direction of Sealed Air i.e., Sealed Air and Seraphim Space go up and down completely randomly.

Pair Corralation between Sealed Air and Seraphim Space

Assuming the 90 days trading horizon Sealed Air Corp is expected to generate 1.32 times more return on investment than Seraphim Space. However, Sealed Air is 1.32 times more volatile than Seraphim Space Investment. It trades about -0.27 of its potential returns per unit of risk. Seraphim Space Investment is currently generating about -0.42 per unit of risk. If you would invest  3,717  in Sealed Air Corp on October 11, 2024 and sell it today you would lose (290.00) from holding Sealed Air Corp or give up 7.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Sealed Air Corp  vs.  Seraphim Space Investment

Sealed Air Corp

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Sealed Air is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Seraphim Space Investment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seraphim Space Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Seraphim Space is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sealed Air and Seraphim Space

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

The idea behind Sealed Air Corp and Seraphim Space Investment 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .