Correlation Between Ecofin Global and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Ecofin Global 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 Ecofin Global and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofin Global Utilities and Sealed Air Corp, you can compare the effects of market volatilities on Ecofin Global 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 Ecofin Global with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofin Global and Sealed Air.
Diversification Opportunities for Ecofin Global and Sealed Air
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ecofin and Sealed is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ecofin Global Utilities 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 Ecofin Global 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 Ecofin Global Utilities 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 Ecofin Global i.e., Ecofin Global and Sealed Air go up and down completely randomly.
Pair Corralation between Ecofin Global and Sealed Air
Assuming the 90 days trading horizon Ecofin Global Utilities is expected to generate 0.9 times more return on investment than Sealed Air. However, Ecofin Global Utilities is 1.12 times less risky than Sealed Air. It trades about -0.2 of its potential returns per unit of risk. Sealed Air Corp is currently generating about -0.25 per unit of risk. If you would invest 19,150 in Ecofin Global Utilities on September 25, 2024 and sell it today you would lose (1,100) from holding Ecofin Global Utilities or give up 5.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ecofin Global Utilities vs. Sealed Air Corp
Performance |
| Timeline |
| Ecofin Global Utilities |
| Sealed Air Corp |
Ecofin Global and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofin Global and Sealed Air
The main advantage of trading using opposite Ecofin Global and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofin Global 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.| Ecofin Global vs. Samsung Electronics Co | Ecofin Global vs. Samsung Electronics Co | Ecofin Global vs. Hyundai Motor | Ecofin Global vs. Toyota Motor Corp |
| Sealed Air vs. Silver Bullet Data | Sealed Air vs. United Utilities Group | Sealed Air vs. Ecofin Global Utilities | Sealed Air vs. Hochschild Mining 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |