Correlation Between Sealed Air and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Vodafone Group 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 Vodafone Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air Corp and Vodafone Group PLC, you can compare the effects of market volatilities on Sealed Air and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Vodafone Group.
Diversification Opportunities for Sealed Air and Vodafone Group
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sealed and Vodafone is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC 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 Corp are associated (or correlated) with Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Sealed Air i.e., Sealed Air and Vodafone Group go up and down completely randomly.
Pair Corralation between Sealed Air and Vodafone Group
Assuming the 90 days trading horizon Sealed Air is expected to generate 1.04 times less return on investment than Vodafone Group. In addition to that, Sealed Air is 1.26 times more volatile than Vodafone Group PLC. It trades about 0.02 of its total potential returns per unit of risk. Vodafone Group PLC is currently generating about 0.02 per unit of volatility. If you would invest 863.00 in Vodafone Group PLC on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Vodafone Group PLC or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.33% |
| Values | Daily Returns |
Sealed Air Corp vs. Vodafone Group PLC
Performance |
| Timeline |
| Sealed Air Corp |
| Vodafone Group PLC |
Sealed Air and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Vodafone Group
The main advantage of trading using opposite Sealed Air and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| Sealed Air vs. Cembra Money Bank | Sealed Air vs. Amedeo Air Four | Sealed Air vs. Cairn Homes PLC | Sealed Air vs. Finnair Oyj |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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