Correlation Between Sealed Air and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on Sealed Air and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Polar Capital.
Diversification Opportunities for Sealed Air and Polar Capital
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sealed and Polar is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Sealed Air i.e., Sealed Air and Polar Capital go up and down completely randomly.
Pair Corralation between Sealed Air and Polar Capital
Assuming the 90 days trading horizon Sealed Air is expected to generate 2.01 times less return on investment than Polar Capital. In addition to that, Sealed Air is 1.21 times more volatile than Polar Capital Technology. It trades about 0.14 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.35 per unit of volatility. If you would invest 35,100 in Polar Capital Technology on October 25, 2024 and sell it today you would earn a total of 3,000 from holding Polar Capital Technology or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Sealed Air Corp vs. Polar Capital Technology
Performance |
| Timeline |
| Sealed Air Corp |
| Polar Capital Technology |
Sealed Air and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Polar Capital
The main advantage of trading using opposite Sealed Air and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Sealed Air vs. First Majestic Silver | Sealed Air vs. Invesco Physical Silver | Sealed Air vs. Blackrock World Mining | Sealed Air vs. Coeur Mining |
| Polar Capital vs. Porvair plc | Polar Capital vs. Anglo Asian Mining | Polar Capital vs. AfriTin Mining | Polar Capital vs. Sealed Air Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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