Correlation Between Hilton Food and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Hilton Food 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 Hilton Food and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Food Group and Sealed Air Corp, you can compare the effects of market volatilities on Hilton Food 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 Hilton Food with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Sealed Air.
Diversification Opportunities for Hilton Food and Sealed Air
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hilton and Sealed is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group 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 Hilton Food 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 Hilton Food Group 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 Hilton Food i.e., Hilton Food and Sealed Air go up and down completely randomly.
Pair Corralation between Hilton Food and Sealed Air
Assuming the 90 days trading horizon Hilton Food Group is expected to generate 0.67 times more return on investment than Sealed Air. However, Hilton Food Group is 1.5 times less risky than Sealed Air. It trades about 0.06 of its potential returns per unit of risk. Sealed Air Corp is currently generating about -0.03 per unit of risk. If you would invest 58,996 in Hilton Food Group on October 16, 2024 and sell it today you would earn a total of 26,604 from holding Hilton Food Group or generate 45.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.75% |
| Values | Daily Returns |
Hilton Food Group vs. Sealed Air Corp
Performance |
| Timeline |
| Hilton Food Group |
| Sealed Air Corp |
Hilton Food and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Sealed Air
The main advantage of trading using opposite Hilton Food and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food 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.| Hilton Food vs. Gaztransport et Technigaz | Hilton Food vs. GreenX Metals | Hilton Food vs. Scandic Hotels Group | Hilton Food vs. Vitec Software Group |
| Sealed Air vs. Axfood AB | Sealed Air vs. Austevoll Seafood ASA | Sealed Air vs. Prosiebensat 1 Media | Sealed Air vs. Hilton Food Group |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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