Correlation Between Sealed Air and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Batm Advanced 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 Batm Advanced 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 Batm Advanced Communications, you can compare the effects of market volatilities on Sealed Air and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Batm Advanced.
Diversification Opportunities for Sealed Air and Batm Advanced
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sealed and Batm is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Sealed Air i.e., Sealed Air and Batm Advanced go up and down completely randomly.
Pair Corralation between Sealed Air and Batm Advanced
Assuming the 90 days trading horizon Sealed Air Corp is expected to generate 0.69 times more return on investment than Batm Advanced. However, Sealed Air Corp is 1.44 times less risky than Batm Advanced. It trades about 0.2 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.07 per unit of risk. If you would invest 3,384 in Sealed Air Corp on November 1, 2024 and sell it today you would earn a total of 161.00 from holding Sealed Air Corp or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Sealed Air Corp vs. Batm Advanced Communications
Performance |
| Timeline |
| Sealed Air Corp |
| Batm Advanced Commun |
Sealed Air and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Batm Advanced
The main advantage of trading using opposite Sealed Air and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| Sealed Air vs. Ashtead Technology Holdings | Sealed Air vs. Xeros Technology Group | Sealed Air vs. Raytheon Technologies Corp | Sealed Air vs. Playtech Plc |
| Batm Advanced vs. Toyota Motor Corp | Batm Advanced vs. SoftBank Group Corp | Batm Advanced vs. Halyk Bank of | Batm Advanced vs. Samsung Electronics Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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