Correlation Between Sealed Air and BECTON

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

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

Diversification Opportunities for Sealed Air and BECTON

0.39

Correlation Coefficient

Sealed Air  BECTON

Weak diversification

The 3 months correlation between Sealed and BECTON is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and BECTON DICKINSON AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BECTON DICKINSON AND 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 BECTON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BECTON DICKINSON AND has no effect on the direction of Sealed Air i.e., Sealed Air and BECTON go up and down completely randomly.

Pair Corralation between Sealed Air and BECTON

Considering the 90-day investment horizon Sealed Air is expected to under-perform the BECTON. In addition to that, Sealed Air is 5.53 times more volatile than BECTON DICKINSON AND. It trades about -0.12 of its total potential returns per unit of risk. BECTON DICKINSON AND is currently generating about 0.02 per unit of volatility. If you would invest  9,083  in BECTON DICKINSON AND on December 4, 2024 and sell it today you would earn a total of  24.00  from holding BECTON DICKINSON AND or generate 0.26% return on investment over 90 days.

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

Sealed Air  vs.  BECTON DICKINSON AND

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.

BECTON DICKINSON AND

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BECTON DICKINSON AND are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BECTON is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sealed Air and BECTON

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

The idea behind Sealed Air and BECTON DICKINSON AND 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.