Correlation Between Impax Environmental and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Impax Environmental 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 Impax Environmental and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Sealed Air Corp, you can compare the effects of market volatilities on Impax Environmental 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 Impax Environmental with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Sealed Air.
Diversification Opportunities for Impax Environmental and Sealed Air
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Impax and Sealed is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets 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 Impax Environmental 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 Impax Environmental Markets 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 Impax Environmental i.e., Impax Environmental and Sealed Air go up and down completely randomly.
Pair Corralation between Impax Environmental and Sealed Air
Assuming the 90 days trading horizon Impax Environmental Markets is expected to generate 0.54 times more return on investment than Sealed Air. However, Impax Environmental Markets is 1.84 times less risky than Sealed Air. It trades about 0.54 of its potential returns per unit of risk. Sealed Air Corp is currently generating about 0.14 per unit of risk. If you would invest 37,700 in Impax Environmental Markets on October 25, 2024 and sell it today you would earn a total of 3,300 from holding Impax Environmental Markets or generate 8.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Impax Environmental Markets vs. Sealed Air Corp
Performance |
| Timeline |
| Impax Environmental |
| Sealed Air Corp |
Impax Environmental and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Sealed Air
The main advantage of trading using opposite Impax Environmental and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental 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.| Impax Environmental vs. Teradata Corp | Impax Environmental vs. Fidelity National Information | Impax Environmental vs. Ion Beam Applications | Impax Environmental vs. Infrastrutture Wireless Italiane |
| Sealed Air vs. First Majestic Silver | Sealed Air vs. Invesco Physical Silver | Sealed Air vs. Blackrock World Mining | Sealed Air vs. Coeur Mining |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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