Correlation Between BranchOut Food and Sealed Air

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

By analyzing existing cross correlation between BranchOut Food Common and Sealed Air, you can compare the effects of market volatilities on BranchOut Food 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 BranchOut Food with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of BranchOut Food and Sealed Air.

Diversification Opportunities for BranchOut Food and Sealed Air

0.09

Correlation Coefficient

BranchOut Food  Sealed Air

Significant diversification

The 3 months correlation between BranchOut and Sealed is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BranchOut Food Common and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and BranchOut Food 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 BranchOut Food Common 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 BranchOut Food i.e., BranchOut Food and Sealed Air go up and down completely randomly.

Pair Corralation between BranchOut Food and Sealed Air

Considering the 90-day investment horizon BranchOut Food Common is expected to generate 2.5 times more return on investment than Sealed Air. However, BranchOut Food is 2.5 times more volatile than Sealed Air. It trades about 0.08 of its potential returns per unit of risk. Sealed Air is currently generating about -0.1 per unit of risk. If you would invest  169.00  in BranchOut Food Common on December 20, 2024 and sell it today you would earn a total of  26.00  from holding BranchOut Food Common or generate 15.38% return on investment over 90 days.

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

BranchOut Food Common  vs.  Sealed Air

BranchOut Food Common

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BranchOut Food Common are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, BranchOut Food reported solid returns over the last few months and may actually be approaching a breakup point.

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 conflicting performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with BranchOut Food and Sealed Air

The main advantage of trading using opposite BranchOut Food and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BranchOut Food 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 BranchOut Food Common 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.