Correlation Between Gerresheimer and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Gerresheimer and Sealed Air 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 Gerresheimer and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gerresheimer AG and Sealed Air Corp, you can compare the effects of market volatilities on Gerresheimer and Sealed Air 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 Gerresheimer with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gerresheimer and Sealed Air.
Diversification Opportunities for Gerresheimer and Sealed Air
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gerresheimer and Sealed is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gerresheimer AG and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp and Gerresheimer 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 Gerresheimer AG are associated (or correlated) with Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air Corp has no effect on the direction of Gerresheimer i.e., Gerresheimer and Sealed Air go up and down completely randomly.
Pair Corralation between Gerresheimer and Sealed Air
Assuming the 90 days trading horizon Gerresheimer AG is expected to under-perform the Sealed Air. In addition to that, Gerresheimer is 1.46 times more volatile than Sealed Air Corp. It trades about -0.14 of its total potential returns per unit of risk. Sealed Air Corp is currently generating about 0.0 per unit of volatility. If you would invest 3,641 in Sealed Air Corp on August 31, 2024 and sell it today you would lose (1.00) from holding Sealed Air Corp or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Gerresheimer AG vs. Sealed Air Corp
Performance |
| Timeline |
| Gerresheimer AG |
| Sealed Air Corp |
Gerresheimer and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gerresheimer and Sealed Air
The main advantage of trading using opposite Gerresheimer and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gerresheimer position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Gerresheimer vs. Batm Advanced Communications | Gerresheimer vs. BE Semiconductor Industries | Gerresheimer vs. Porvair plc | Gerresheimer vs. Pentair PLC |
| Sealed Air vs. Neometals | Sealed Air vs. Coor Service Management | Sealed Air vs. Aeorema Communications Plc | Sealed Air vs. JLEN Environmental Assets |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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