Correlation Between Sealed Air and State Bank
Can any of the company-specific risk be diversified away by investing in both Sealed Air and State Bank 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 State Bank 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 State Bank of, you can compare the effects of market volatilities on Sealed Air and State Bank 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 State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and State Bank.
Diversification Opportunities for Sealed Air and State Bank
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sealed and State is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Sealed Air i.e., Sealed Air and State Bank go up and down completely randomly.
Pair Corralation between Sealed Air and State Bank
Assuming the 90 days trading horizon Sealed Air Corp is expected to under-perform the State Bank. In addition to that, Sealed Air is 1.37 times more volatile than State Bank of. It trades about -0.01 of its total potential returns per unit of risk. State Bank of is currently generating about 0.07 per unit of volatility. If you would invest 6,851 in State Bank of on August 31, 2024 and sell it today you would earn a total of 3,129 from holding State Bank of or generate 45.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.7% |
| Values | Daily Returns |
Sealed Air Corp vs. State Bank of
Performance |
| Timeline |
| Sealed Air Corp |
| State Bank |
Sealed Air and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and State Bank
The main advantage of trading using opposite Sealed Air and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank'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 |
| State Bank vs. Amedeo Air Four | State Bank vs. Take Two Interactive Software | State Bank vs. Wizz Air Holdings | State Bank 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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