Correlation Between Sealed Air and Henderson High
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Henderson High 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 Henderson High 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 Henderson High Income, you can compare the effects of market volatilities on Sealed Air and Henderson High 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 Henderson High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Henderson High.
Diversification Opportunities for Sealed Air and Henderson High
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sealed and Henderson is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Henderson High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson High Income 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 Henderson High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson High Income has no effect on the direction of Sealed Air i.e., Sealed Air and Henderson High go up and down completely randomly.
Pair Corralation between Sealed Air and Henderson High
Assuming the 90 days trading horizon Sealed Air is expected to generate 1.65 times less return on investment than Henderson High. In addition to that, Sealed Air is 2.4 times more volatile than Henderson High Income. It trades about 0.01 of its total potential returns per unit of risk. Henderson High Income is currently generating about 0.05 per unit of volatility. If you would invest 14,856 in Henderson High Income on September 14, 2024 and sell it today you would earn a total of 1,552 from holding Henderson High Income or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.8% |
| Values | Daily Returns |
Sealed Air Corp vs. Henderson High Income
Performance |
| Timeline |
| Sealed Air Corp |
| Henderson High Income |
Sealed Air and Henderson High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Henderson High
The main advantage of trading using opposite Sealed Air and Henderson High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Henderson High 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 Henderson High will offset losses from the drop in Henderson High's long position.| Sealed Air vs. Cornish Metals | Sealed Air vs. European Metals Holdings | Sealed Air vs. BW Offshore | Sealed Air vs. Bloomsbury Publishing Plc |
| Henderson High vs. Catalyst Media Group | Henderson High vs. CATLIN GROUP | Henderson High vs. Tamburi Investment Partners | Henderson High vs. Magnora ASA |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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