Correlation Between News and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both News 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 News and SEALED AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between News Corporation and SEALED AIR , you can compare the effects of market volatilities on News 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 News with a short position of SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of News and SEALED AIR.
Diversification Opportunities for News and SEALED AIR
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between News and SEALED is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding News Corp. and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR and News 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 News Corporation 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 News i.e., News and SEALED AIR go up and down completely randomly.
Pair Corralation between News and SEALED AIR
Assuming the 90 days trading horizon News Corporation is expected to generate 1.03 times more return on investment than SEALED AIR. However, News is 1.03 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 -0.06 per unit of risk. If you would invest 3,060 in News Corporation on December 4, 2024 and sell it today you would lose (40.00) from holding News Corporation or give up 1.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
News Corp. vs. SEALED AIR
Performance |
Timeline |
News |
SEALED AIR |
News and SEALED AIR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with News and SEALED AIR
The main advantage of trading using opposite News and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News 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.News vs. GOODYEAR T RUBBER | News vs. Applied Materials | News vs. APPLIED MATERIALS | News vs. Goodyear Tire Rubber |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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