Correlation Between Flexible Solutions and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions 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 Flexible Solutions and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Sealed Air, you can compare the effects of market volatilities on Flexible Solutions 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 Flexible Solutions with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Sealed Air.
Diversification Opportunities for Flexible Solutions and Sealed Air
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexible and Sealed is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and Flexible Solutions 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 Flexible Solutions International 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 Flexible Solutions i.e., Flexible Solutions and Sealed Air go up and down completely randomly.
Pair Corralation between Flexible Solutions and Sealed Air
Considering the 90-day investment horizon Flexible Solutions is expected to generate 5.4 times less return on investment than Sealed Air. In addition to that, Flexible Solutions is 3.0 times more volatile than Sealed Air. It trades about 0.0 of its total potential returns per unit of risk. Sealed Air is currently generating about 0.05 per unit of volatility. If you would invest 3,577 in Sealed Air on August 30, 2024 and sell it today you would earn a total of 47.00 from holding Sealed Air or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Sealed Air
Performance |
| Timeline |
| Flexible Solutions |
| Sealed Air |
Flexible Solutions and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Sealed Air
The main advantage of trading using opposite Flexible Solutions and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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.| Flexible Solutions vs. Orion Engineered Carbons | Flexible Solutions vs. International Flavors Fragrances | Flexible Solutions vs. Sociedad Quimica y | Flexible Solutions vs. Albemarle Corp |
| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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