Correlation Between Old Republic and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Old Republic 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 Old Republic and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Republic International and Sealed Air, you can compare the effects of market volatilities on Old Republic 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 Old Republic with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Republic and Sealed Air.
Diversification Opportunities for Old Republic and Sealed Air
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Sealed is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Old Republic International and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and Old Republic 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 Old Republic 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 Old Republic i.e., Old Republic and Sealed Air go up and down completely randomly.
Pair Corralation between Old Republic and Sealed Air
Considering the 90-day investment horizon Old Republic International is expected to under-perform the Sealed Air. But the stock apears to be less risky and, when comparing its historical volatility, Old Republic International is 1.34 times less risky than Sealed Air. The stock trades about -0.11 of its potential returns per unit of risk. The Sealed Air is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,567 in Sealed Air on September 12, 2024 and sell it today you would earn a total of 117.00 from holding Sealed Air or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Republic International vs. Sealed Air
Performance |
| Timeline |
| Old Republic Interna |
| Sealed Air |
Old Republic and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Republic and Sealed Air
The main advantage of trading using opposite Old Republic and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Republic 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.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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