Correlation Between Apple and SEALED AIR

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

By analyzing existing cross correlation between Apple Inc and SEALED AIR , you can compare the effects of market volatilities on Apple and SEALED AIR 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 Apple with a short position of SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and SEALED AIR.

Diversification Opportunities for Apple and SEALED AIR

-0.21

Correlation Coefficient

Apple  SEALED AIR

Very good diversification

The 3 months correlation between Apple and SEALED is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR and Apple 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 Apple Inc are associated (or correlated) with SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of Apple i.e., Apple and SEALED AIR go up and down completely randomly.

Pair Corralation between Apple and SEALED AIR

Assuming the 90 days trading horizon Apple Inc is expected to generate 1.27 times more return on investment than SEALED AIR. However, Apple is 1.27 times more volatile than SEALED AIR . It trades about 0.01 of its potential returns per unit of risk. SEALED AIR is currently generating about -0.1 per unit of risk. If you would invest  22,935  in Apple Inc on December 3, 2024 and sell it today you would earn a total of  65.00  from holding Apple Inc or generate 0.28% return on investment over 90 days.

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

Apple Inc  vs.  SEALED AIR

Apple Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Apple is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

SEALED AIR

Risk-Adjusted Performance

Very Weak

Over the last 90 days SEALED AIR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile 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.

Pair Trading with Apple and SEALED AIR

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

The idea behind Apple Inc and SEALED AIR 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.