Correlation Between Sealed Air and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Sealed Air and JLEN Environmental 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 JLEN Environmental 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 JLEN Environmental Assets, you can compare the effects of market volatilities on Sealed Air and JLEN Environmental 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 JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and JLEN Environmental.
Diversification Opportunities for Sealed Air and JLEN Environmental
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sealed and JLEN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets 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 JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Sealed Air i.e., Sealed Air and JLEN Environmental go up and down completely randomly.
Pair Corralation between Sealed Air and JLEN Environmental
Assuming the 90 days trading horizon Sealed Air Corp is expected to generate 1.69 times more return on investment than JLEN Environmental. However, Sealed Air is 1.69 times more volatile than JLEN Environmental Assets. It trades about -0.03 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.06 per unit of risk. If you would invest 4,993 in Sealed Air Corp on October 16, 2024 and sell it today you would lose (1,598) from holding Sealed Air Corp or give up 32.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 87.75% |
Values | Daily Returns |
Sealed Air Corp vs. JLEN Environmental Assets
Performance |
Timeline |
Sealed Air Corp |
JLEN Environmental Assets |
Sealed Air and JLEN Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sealed Air and JLEN Environmental
The main advantage of trading using opposite Sealed Air and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental's long position.Sealed Air vs. Axfood AB | Sealed Air vs. Austevoll Seafood ASA | Sealed Air vs. Prosiebensat 1 Media | Sealed Air vs. Hilton Food Group |
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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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