Correlation Between Sealed Air and Chr Hansen

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

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

Diversification Opportunities for Sealed Air and Chr Hansen

-0.34

Correlation Coefficient

Sealed Air  Chr Hansen

Very good diversification

The 3 months correlation between Sealed and Chr is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Chr Hansen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chr Hansen Holding 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 Chr Hansen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chr Hansen Holding has no effect on the direction of Sealed Air i.e., Sealed Air and Chr Hansen go up and down completely randomly.

Pair Corralation between Sealed Air and Chr Hansen

If you would invest  3,404  in Sealed Air on September 5, 2024 and sell it today you would earn a total of  261.00  from holding Sealed Air or generate 7.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Sealed Air  vs.  Chr Hansen Holding

Sealed Air

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sealed Air are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Sealed Air may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Chr Hansen Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chr Hansen Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Chr Hansen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sealed Air and Chr Hansen

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

The idea behind Sealed Air and Chr Hansen Holding 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.