Correlation Between Sealed Air and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Eiffage SA 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 Eiffage SA 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 Eiffage SA, you can compare the effects of market volatilities on Sealed Air and Eiffage SA 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 Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Eiffage SA.
Diversification Opportunities for Sealed Air and Eiffage SA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sealed and Eiffage is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA 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 Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA has no effect on the direction of Sealed Air i.e., Sealed Air and Eiffage SA go up and down completely randomly.
Pair Corralation between Sealed Air and Eiffage SA
Assuming the 90 days trading horizon Sealed Air Corp is expected to generate 1.63 times more return on investment than Eiffage SA. However, Sealed Air is 1.63 times more volatile than Eiffage SA. It trades about 0.02 of its potential returns per unit of risk. Eiffage SA is currently generating about 0.01 per unit of risk. If you would invest 3,285 in Sealed Air Corp on December 2, 2024 and sell it today you would earn a total of 163.00 from holding Sealed Air Corp or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.27% |
| Values | Daily Returns |
Sealed Air Corp vs. Eiffage SA
Performance |
| Timeline |
| Sealed Air Corp |
| Eiffage SA |
Sealed Air and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Eiffage SA
The main advantage of trading using opposite Sealed Air and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Eiffage SA 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.| Sealed Air vs. Blackrock World Mining | Sealed Air vs. Pan American Silver | Sealed Air vs. Invesco Physical Silver | Sealed Air vs. Fortuna Silver Mines |
| Eiffage SA vs. Lowland Investment Co | Eiffage SA vs. Aberdeen Diversified Income | Eiffage SA vs. Ruffer Investment | Eiffage SA vs. Vietnam Enterprise Investments |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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