Correlation Between SEALED AIR and Fair Isaac

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

By analyzing existing cross correlation between SEALED AIR and Fair Isaac Corp, you can compare the effects of market volatilities on SEALED AIR and Fair Isaac 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 Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and Fair Isaac.

Diversification Opportunities for SEALED AIR and Fair Isaac

0.65

Correlation Coefficient

SEALED AIR  Fair Isaac

Poor diversification

The 3 months correlation between SEALED and Fair is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and Fair Isaac Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac Corp 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 are associated (or correlated) with Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac Corp has no effect on the direction of SEALED AIR i.e., SEALED AIR and Fair Isaac go up and down completely randomly.

Pair Corralation between SEALED AIR and Fair Isaac

Assuming the 90 days trading horizon SEALED AIR is expected to generate 0.76 times more return on investment than Fair Isaac. However, SEALED AIR is 1.31 times less risky than Fair Isaac. It trades about -0.22 of its potential returns per unit of risk. Fair Isaac Corp is currently generating about -0.38 per unit of risk. If you would invest  3,440  in SEALED AIR on October 4, 2024 and sell it today you would lose (200.00) from holding SEALED AIR or give up 5.81% of portfolio value over 90 days.

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

SEALED AIR   vs.  Fair Isaac Corp

SEALED AIR

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SEALED AIR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Fair Isaac Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Fair Isaac may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SEALED AIR and Fair Isaac

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

The idea behind SEALED AIR and Fair Isaac Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..