Correlation Between Sealed Air and SupplyMe Capital
Can any of the company-specific risk be diversified away by investing in both Sealed Air and SupplyMe 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 SupplyMe 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 SupplyMe Capital PLC, you can compare the effects of market volatilities on Sealed Air and SupplyMe 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 SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and SupplyMe Capital.
Diversification Opportunities for Sealed Air and SupplyMe Capital
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sealed and SupplyMe is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital 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 SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Sealed Air i.e., Sealed Air and SupplyMe Capital go up and down completely randomly.
Pair Corralation between Sealed Air and SupplyMe Capital
Assuming the 90 days trading horizon Sealed Air is expected to generate 97.99 times less return on investment than SupplyMe Capital. But when comparing it to its historical volatility, Sealed Air Corp is 12.72 times less risky than SupplyMe Capital. It trades about 0.02 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.30 in SupplyMe Capital PLC on September 20, 2024 and sell it today you would earn a total of 0.07 from holding SupplyMe Capital PLC or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Sealed Air Corp vs. SupplyMe Capital PLC
Performance |
| Timeline |
| Sealed Air Corp |
| SupplyMe Capital PLC |
Sealed Air and SupplyMe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and SupplyMe Capital
The main advantage of trading using opposite Sealed Air and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, SupplyMe 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 SupplyMe Capital will offset losses from the drop in SupplyMe Capital's long position.| Sealed Air vs. Zoom Video Communications | Sealed Air vs. Gruppo MutuiOnline SpA | Sealed Air vs. Universal Display Corp | Sealed Air vs. International Biotechnology Trust |
| SupplyMe Capital vs. Premier Foods PLC | SupplyMe Capital vs. Ebro Foods | SupplyMe Capital vs. Roebuck Food Group | SupplyMe 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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