Correlation Between Sealed Air and STOAU

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

By analyzing existing cross correlation between Sealed Air and STOAU 3649 29 APR 31, you can compare the effects of market volatilities on Sealed Air and STOAU 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 STOAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and STOAU.

Diversification Opportunities for Sealed Air and STOAU

0.33

Correlation Coefficient

Sealed Air  STOAU

Weak diversification

The 3 months correlation between Sealed and STOAU is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and STOAU 3649 29 APR 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STOAU 3649 29 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 STOAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STOAU 3649 29 has no effect on the direction of Sealed Air i.e., Sealed Air and STOAU go up and down completely randomly.

Pair Corralation between Sealed Air and STOAU

Considering the 90-day investment horizon Sealed Air is expected to under-perform the STOAU. In addition to that, Sealed Air is 1.12 times more volatile than STOAU 3649 29 APR 31. It trades about -0.02 of its total potential returns per unit of risk. STOAU 3649 29 APR 31 is currently generating about -0.01 per unit of volatility. If you would invest  8,942  in STOAU 3649 29 APR 31 on October 25, 2024 and sell it today you would lose (121.00) from holding STOAU 3649 29 APR 31 or give up 1.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	58.54%
Values	Daily Returns

Sealed Air  vs.  STOAU 3649 29 APR 31

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.

STOAU 3649 29

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STOAU 3649 29 APR 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, STOAU is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sealed Air and STOAU

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

The idea behind Sealed Air and STOAU 3649 29 APR 31 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.