Correlation Between New Residential and Sealed Air
Can any of the company-specific risk be diversified away by investing in both New Residential 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 New Residential and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Residential Investment and Sealed Air Corp, you can compare the effects of market volatilities on New Residential 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 New Residential with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Residential and Sealed Air.
Diversification Opportunities for New Residential and Sealed Air
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Sealed is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding New Residential Investment and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp and New Residential 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 New Residential Investment 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 Corp has no effect on the direction of New Residential i.e., New Residential and Sealed Air go up and down completely randomly.
Pair Corralation between New Residential and Sealed Air
Assuming the 90 days trading horizon New Residential Investment is expected to generate 0.78 times more return on investment than Sealed Air. However, New Residential Investment is 1.28 times less risky than Sealed Air. It trades about 0.05 of its potential returns per unit of risk. Sealed Air Corp is currently generating about 0.02 per unit of risk. If you would invest 888.00 in New Residential Investment on October 11, 2024 and sell it today you would earn a total of 204.00 from holding New Residential Investment or generate 22.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.43% |
| Values | Daily Returns |
New Residential Investment vs. Sealed Air Corp
Performance |
| Timeline |
| New Residential Inve |
| Sealed Air Corp |
New Residential and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Residential and Sealed Air
The main advantage of trading using opposite New Residential and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Residential 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.| New Residential vs. Walmart | New Residential vs. BYD Co | New Residential vs. Volkswagen AG | New Residential vs. Volkswagen AG Non Vtg |
| Sealed Air vs. LPKF Laser Electronics | Sealed Air vs. STMicroelectronics NV | Sealed Air vs. Universal Music Group | Sealed Air vs. Gear4music Plc |
Check out your portfolio center.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.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Directory Find actively traded commodities issued by global exchanges |