Correlation Between Bridgestone and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both Bridgestone 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 Bridgestone and SEALED AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgestone and SEALED AIR , you can compare the effects of market volatilities on Bridgestone 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 Bridgestone with a short position of SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgestone and SEALED AIR.
Diversification Opportunities for Bridgestone and SEALED AIR
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bridgestone and SEALED is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bridgestone and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR and Bridgestone 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 Bridgestone 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 has no effect on the direction of Bridgestone i.e., Bridgestone and SEALED AIR go up and down completely randomly.
Pair Corralation between Bridgestone and SEALED AIR
Assuming the 90 days trading horizon Bridgestone is expected to under-perform the SEALED AIR. But the stock apears to be less risky and, when comparing its historical volatility, Bridgestone is 1.12 times less risky than SEALED AIR. The stock trades about -0.02 of its potential returns per unit of risk. The SEALED AIR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,217 in SEALED AIR on October 26, 2024 and sell it today you would earn a total of 103.00 from holding SEALED AIR or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgestone vs. SEALED AIR
Performance |
| Timeline |
| Bridgestone |
| SEALED AIR |
Bridgestone and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgestone and SEALED AIR
The main advantage of trading using opposite Bridgestone and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgestone 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.| Bridgestone vs. SEALED AIR | Bridgestone vs. Air New Zealand | Bridgestone vs. Corsair Gaming | Bridgestone vs. RYANAIR HLDGS ADR |
| SEALED AIR vs. SQUIRREL MEDIA SA | SEALED AIR vs. ANTA SPORTS PRODUCT | SEALED AIR vs. Nexstar Media Group | SEALED AIR vs. COMBA TELECOM SYST |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |