Correlation Between Sealed Air and 65339KCP3

Can any of the company-specific risk be diversified away by investing in both Sealed Air and 65339KCP3 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 65339KCP3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sealed Air and NEE 505 28 FEB 33, you can compare the effects of market volatilities on Sealed Air and 65339KCP3 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 65339KCP3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and 65339KCP3.

Diversification Opportunities for Sealed Air and 65339KCP3

0.54

Correlation Coefficient

Sealed Air  65339KCP3

Very weak diversification

The 3 months correlation between Sealed and 65339KCP3 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and NEE 505 28 FEB 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEE 505 28 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 65339KCP3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEE 505 28 has no effect on the direction of Sealed Air i.e., Sealed Air and 65339KCP3 go up and down completely randomly.

Pair Corralation between Sealed Air and 65339KCP3

Considering the 90-day investment horizon Sealed Air is expected to generate 0.69 times more return on investment than 65339KCP3. However, Sealed Air is 1.44 times less risky than 65339KCP3. It trades about 0.17 of its potential returns per unit of risk. NEE 505 28 FEB 33 is currently generating about -0.22 per unit of risk. If you would invest  3,403  in Sealed Air on October 25, 2024 and sell it today you would earn a total of  137.00  from holding Sealed Air or generate 4.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Sealed Air  vs.  NEE 505 28 FEB 33

Sealed Air

Risk-Adjusted Performance

0 of 100

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.

NEE 505 28

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEE 505 28 FEB 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NEE 505 28 FEB 33 investors.

Pair Trading with Sealed Air and 65339KCP3

The main advantage of trading using opposite Sealed Air and 65339KCP3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, 65339KCP3 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 65339KCP3 will offset losses from the drop in 65339KCP3's long position.

The idea behind Sealed Air and NEE 505 28 FEB 33 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 Commodity Directory module to find actively traded commodities issued by global exchanges.