Correlation Between Sealed Air and Quilter PLC
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Quilter PLC 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 Quilter PLC 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 Quilter PLC, you can compare the effects of market volatilities on Sealed Air and Quilter PLC 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 Quilter PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Quilter PLC.
Diversification Opportunities for Sealed Air and Quilter PLC
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Quilter is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Quilter PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quilter PLC 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 Quilter PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quilter PLC has no effect on the direction of Sealed Air i.e., Sealed Air and Quilter PLC go up and down completely randomly.
Pair Corralation between Sealed Air and Quilter PLC
Assuming the 90 days trading horizon Sealed Air Corp is expected to under-perform the Quilter PLC. In addition to that, Sealed Air is 1.13 times more volatile than Quilter PLC. It trades about -0.02 of its total potential returns per unit of risk. Quilter PLC is currently generating about 0.07 per unit of volatility. If you would invest 8,413 in Quilter PLC on August 31, 2024 and sell it today you would earn a total of 6,217 from holding Quilter PLC or generate 73.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.28% |
| Values | Daily Returns |
Sealed Air Corp vs. Quilter PLC
Performance |
| Timeline |
| Sealed Air Corp |
| Quilter PLC |
Sealed Air and Quilter PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Quilter PLC
The main advantage of trading using opposite Sealed Air and Quilter PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Quilter PLC 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 Quilter PLC will offset losses from the drop in Quilter PLC's long position.| Sealed Air vs. Neometals | Sealed Air vs. Coor Service Management | Sealed Air vs. Aeorema Communications Plc | Sealed Air vs. JLEN Environmental Assets |
| Quilter PLC vs. Vienna Insurance Group | Quilter PLC vs. Air Products Chemicals | Quilter PLC vs. Systemair AB | Quilter PLC vs. Sabre Insurance Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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