Correlation Between 88339WAA4 and Sealed Air

Can any of the company-specific risk be diversified away by investing in both 88339WAA4 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 88339WAA4 and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WMB 35 15 OCT 51 and Sealed Air, you can compare the effects of market volatilities on 88339WAA4 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 88339WAA4 with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88339WAA4 and Sealed Air.

Diversification Opportunities for 88339WAA4 and Sealed Air

-0.16

Correlation Coefficient

88339WAA4  Sealed Air

Good diversification

The 3 months correlation between 88339WAA4 and Sealed is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding WMB 35 15 OCT 51 and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and 88339WAA4 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 WMB 35 15 OCT 51 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 88339WAA4 i.e., 88339WAA4 and Sealed Air go up and down completely randomly.

Pair Corralation between 88339WAA4 and Sealed Air

Assuming the 90 days trading horizon WMB 35 15 OCT 51 is expected to under-perform the Sealed Air. But the bond apears to be less risky and, when comparing its historical volatility, WMB 35 15 OCT 51 is 1.67 times less risky than Sealed Air. The bond trades about -0.01 of its potential returns per unit of risk. The Sealed Air is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,571  in Sealed Air on September 24, 2024 and sell it today you would lose (208.00) from holding Sealed Air or give up 5.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.16%
Values	Daily Returns

WMB 35 15 OCT 51  vs.  Sealed Air

WMB 35 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WMB 35 15 OCT 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 88339WAA4 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with 88339WAA4 and Sealed Air

The main advantage of trading using opposite 88339WAA4 and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88339WAA4 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 WMB 35 15 OCT 51 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.