Correlation Between Advanced Medical and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Advanced Medical 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 Advanced Medical and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Sealed Air Corp, you can compare the effects of market volatilities on Advanced Medical 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 Advanced Medical with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Sealed Air.
Diversification Opportunities for Advanced Medical and Sealed Air
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and Sealed is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions 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 Advanced Medical 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and Sealed Air go up and down completely randomly.
Pair Corralation between Advanced Medical and Sealed Air
Assuming the 90 days trading horizon Advanced Medical is expected to generate 1.54 times less return on investment than Sealed Air. In addition to that, Advanced Medical is 1.14 times more volatile than Sealed Air Corp. It trades about 0.0 of its total potential returns per unit of risk. Sealed Air Corp is currently generating about 0.01 per unit of volatility. If you would invest 3,814 in Sealed Air Corp on September 2, 2024 and sell it today you would lose (154.00) from holding Sealed Air Corp or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.92% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Sealed Air Corp
Performance |
| Timeline |
| Advanced Medical Sol |
| Sealed Air Corp |
Advanced Medical and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Sealed Air
The main advantage of trading using opposite Advanced Medical and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical 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.| Advanced Medical vs. JD Sports Fashion | Advanced Medical vs. Samsung Electronics Co | Advanced Medical vs. Grand Vision Media | Advanced Medical vs. United States Steel |
| Sealed Air vs. Uniper SE | Sealed Air vs. Mulberry Group PLC | Sealed Air vs. London Security Plc | Sealed Air vs. Triad Group PLC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |