Correlation Between Fevertree Drinks and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks 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 Fevertree Drinks and SEALED AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fevertree Drinks PLC and SEALED AIR , you can compare the effects of market volatilities on Fevertree Drinks 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 Fevertree Drinks with a short position of SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and SEALED AIR.
Diversification Opportunities for Fevertree Drinks and SEALED AIR
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fevertree and SEALED is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks PLC and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR and Fevertree Drinks 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 Fevertree Drinks PLC 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 Fevertree Drinks i.e., Fevertree Drinks and SEALED AIR go up and down completely randomly.
Pair Corralation between Fevertree Drinks and SEALED AIR
Assuming the 90 days trading horizon Fevertree Drinks PLC is expected to under-perform the SEALED AIR. In addition to that, Fevertree Drinks is 1.42 times more volatile than SEALED AIR . It trades about -0.09 of its total potential returns per unit of risk. SEALED AIR is currently generating about 0.03 per unit of volatility. If you would invest 3,301 in SEALED AIR on October 25, 2024 and sell it today you would earn a total of 59.00 from holding SEALED AIR or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fevertree Drinks PLC vs. SEALED AIR
Performance |
| Timeline |
| Fevertree Drinks PLC |
| SEALED AIR |
Fevertree Drinks and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fevertree Drinks and SEALED AIR
The main advantage of trading using opposite Fevertree Drinks and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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.| Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc | Fevertree Drinks vs. Apple Inc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |