Correlation Between Sealed Air and Uniroyal Global

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

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

Diversification Opportunities for Sealed Air and Uniroyal Global

0.16

Correlation Coefficient

Sealed Air  Uniroyal Global

Average diversification

The 3 months correlation between Sealed and Uniroyal is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Uniroyal Global Engineered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniroyal Global Engi 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 Uniroyal Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniroyal Global Engi has no effect on the direction of Sealed Air i.e., Sealed Air and Uniroyal Global go up and down completely randomly.

Pair Corralation between Sealed Air and Uniroyal Global

Considering the 90-day investment horizon Sealed Air is expected to under-perform the Uniroyal Global. But the stock apears to be less risky and, when comparing its historical volatility, Sealed Air is 70.72 times less risky than Uniroyal Global. The stock trades about -0.11 of its potential returns per unit of risk. The Uniroyal Global Engineered is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.08  in Uniroyal Global Engineered on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Uniroyal Global Engineered or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Sealed Air  vs.  Uniroyal Global Engineered

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 conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Uniroyal Global Engi

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Uniroyal Global Engineered are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward indicators, Uniroyal Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sealed Air and Uniroyal Global

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

The idea behind Sealed Air and Uniroyal Global Engineered 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.