Correlation Between Sealed Air and Anglo Asian
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Anglo Asian 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 Anglo Asian 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 Anglo Asian Mining, you can compare the effects of market volatilities on Sealed Air and Anglo Asian 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 Anglo Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Anglo Asian.
Diversification Opportunities for Sealed Air and Anglo Asian
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sealed and Anglo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Anglo Asian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Asian Mining 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 Anglo Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Asian Mining has no effect on the direction of Sealed Air i.e., Sealed Air and Anglo Asian go up and down completely randomly.
Pair Corralation between Sealed Air and Anglo Asian
Assuming the 90 days trading horizon Sealed Air is expected to generate 4.37 times less return on investment than Anglo Asian. But when comparing it to its historical volatility, Sealed Air Corp is 2.08 times less risky than Anglo Asian. It trades about 0.04 of its potential returns per unit of risk. Anglo Asian Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,500 in Anglo Asian Mining on August 25, 2024 and sell it today you would earn a total of 5,100 from holding Anglo Asian Mining or generate 113.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.75% |
| Values | Daily Returns |
Sealed Air Corp vs. Anglo Asian Mining
Performance |
| Timeline |
| Sealed Air Corp |
| Anglo Asian Mining |
Sealed Air and Anglo Asian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Anglo Asian
The main advantage of trading using opposite Sealed Air and Anglo Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Anglo Asian 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 Anglo Asian will offset losses from the drop in Anglo Asian's long position.| Sealed Air vs. Samsung Electronics Co | Sealed Air vs. Samsung Electronics Co | Sealed Air vs. Hyundai Motor | Sealed Air vs. Toyota Motor Corp |
| Anglo Asian vs. Sealed Air Corp | Anglo Asian vs. MTI Wireless Edge | Anglo Asian vs. Ryanair Holdings plc | Anglo Asian vs. Virgin Wines UK |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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