Correlation Between Sealed Air and TXNM Energy,

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

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

Diversification Opportunities for Sealed Air and TXNM Energy,

0.49

Correlation Coefficient

Sealed Air  TXNM Energy,

Very weak diversification

The 3 months correlation between Sealed and TXNM is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and TXNM Energy, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TXNM Energy, 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 TXNM Energy,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TXNM Energy, has no effect on the direction of Sealed Air i.e., Sealed Air and TXNM Energy, go up and down completely randomly.

Pair Corralation between Sealed Air and TXNM Energy,

Considering the 90-day investment horizon Sealed Air is expected to under-perform the TXNM Energy,. In addition to that, Sealed Air is 1.99 times more volatile than TXNM Energy,. It trades about -0.02 of its total potential returns per unit of risk. TXNM Energy, is currently generating about 0.02 per unit of volatility. If you would invest  4,560  in TXNM Energy, on September 4, 2024 and sell it today you would earn a total of  345.00  from holding TXNM Energy, or generate 7.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Sealed Air  vs.  TXNM Energy,

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 weak technical and fundamental indicators, Sealed Air may actually be approaching a critical reversion point that can send shares even higher in January 2025.

TXNM Energy,

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TXNM Energy, are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, TXNM Energy, displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sealed Air and TXNM Energy,

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

The idea behind Sealed Air and TXNM Energy, 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .