Correlation Between Sealed Air and Ball

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

By analyzing existing cross correlation between Sealed Air and Ball Corporation, you can compare the effects of market volatilities on Sealed Air and Ball 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 Ball. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Ball.

Diversification Opportunities for Sealed Air and Ball

0.77

Correlation Coefficient

Sealed Air  Ball

Poor diversification

The 3 months correlation between Sealed and Ball is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball 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 Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of Sealed Air i.e., Sealed Air and Ball go up and down completely randomly.

Pair Corralation between Sealed Air and Ball

Considering the 90-day investment horizon Sealed Air is expected to under-perform the Ball. In addition to that, Sealed Air is 1.14 times more volatile than Ball Corporation. It trades about -0.01 of its total potential returns per unit of risk. Ball Corporation is currently generating about 0.01 per unit of volatility. If you would invest  5,120  in Ball Corporation on December 2, 2024 and sell it today you would earn a total of  149.00  from holding Ball Corporation or generate 2.91% return on investment over 90 days.

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

Sealed Air  vs.  Ball Corp.

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 rather sound technical and fundamental indicators, Sealed Air is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Ball

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ball Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Sealed Air and Ball

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

The idea behind Sealed Air and Ball Corporation 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.