Correlation Between NECELE and Sealed Air

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

By analyzing existing cross correlation between NECELE 217 25 NOV 26 and Sealed Air, you can compare the effects of market volatilities on NECELE and Sealed Air 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 NECELE with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of NECELE and Sealed Air.

Diversification Opportunities for NECELE and Sealed Air

-0.21

Correlation Coefficient

NECELE  Sealed Air

Very good diversification

The 3 months correlation between NECELE and Sealed is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding NECELE 217 25 NOV 26 and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and NECELE 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 NECELE 217 25 NOV 26 are associated (or correlated) with Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air has no effect on the direction of NECELE i.e., NECELE and Sealed Air go up and down completely randomly.

Pair Corralation between NECELE and Sealed Air

Assuming the 90 days trading horizon NECELE 217 25 NOV 26 is expected to under-perform the Sealed Air. But the bond apears to be less risky and, when comparing its historical volatility, NECELE 217 25 NOV 26 is 1.23 times less risky than Sealed Air. The bond trades about -0.15 of its potential returns per unit of risk. The Sealed Air is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  3,340  in Sealed Air on December 30, 2024 and sell it today you would lose (440.00) from holding Sealed Air or give up 13.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.61%
Values	Daily Returns

NECELE 217 25 NOV 26  vs.  Sealed Air

NECELE 217 25

Risk-Adjusted Performance

Very Weak

Over the last 90 days NECELE 217 25 NOV 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for NECELE 217 25 NOV 26 investors.

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.

Pair Trading with NECELE and Sealed Air

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

The idea behind NECELE 217 25 NOV 26 and Sealed Air 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.