Correlation Between Graphic Packaging and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Graphic Packaging 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 Graphic Packaging and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphic Packaging Holding and Sealed Air, you can compare the effects of market volatilities on Graphic Packaging 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 Graphic Packaging with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphic Packaging and Sealed Air.
Diversification Opportunities for Graphic Packaging and Sealed Air
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Graphic and Sealed is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Graphic Packaging Holding and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and Graphic Packaging 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 Graphic Packaging Holding 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 Graphic Packaging i.e., Graphic Packaging and Sealed Air go up and down completely randomly.
Pair Corralation between Graphic Packaging and Sealed Air
Considering the 90-day investment horizon Graphic Packaging Holding is expected to under-perform the Sealed Air. In addition to that, Graphic Packaging is 1.13 times more volatile than Sealed Air. It trades about -0.08 of its total potential returns per unit of risk. Sealed Air is currently generating about -0.06 per unit of volatility. If you would invest 3,632 in Sealed Air on August 24, 2024 and sell it today you would lose (79.00) from holding Sealed Air or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphic Packaging Holding vs. Sealed Air
Performance |
| Timeline |
| Graphic Packaging Holding |
| Sealed Air |
Graphic Packaging and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphic Packaging and Sealed Air
The main advantage of trading using opposite Graphic Packaging and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphic Packaging 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.| Graphic Packaging vs. Ball Corporation | Graphic Packaging vs. Silgan Holdings | Graphic Packaging vs. Sonoco Products | Graphic Packaging vs. Reynolds Consumer Products |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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