Correlation Between Procter Gamble and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Procter Gamble 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 Procter Gamble and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Sealed Air, you can compare the effects of market volatilities on Procter Gamble 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 Procter Gamble with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Sealed Air.
Diversification Opportunities for Procter Gamble and Sealed Air
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Procter and Sealed is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and Procter Gamble 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 Procter Gamble 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 Procter Gamble i.e., Procter Gamble and Sealed Air go up and down completely randomly.
Pair Corralation between Procter Gamble and Sealed Air
Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.78 times more return on investment than Sealed Air. However, Procter Gamble is 1.28 times less risky than Sealed Air. It trades about 0.17 of its potential returns per unit of risk. Sealed Air is currently generating about 0.12 per unit of risk. If you would invest 16,603 in Procter Gamble on September 12, 2024 and sell it today you would earn a total of 625.00 from holding Procter Gamble or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Procter Gamble vs. Sealed Air
Performance |
| Timeline |
| Procter Gamble |
| Sealed Air |
Procter Gamble and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Procter Gamble and Sealed Air
The main advantage of trading using opposite Procter Gamble and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble 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.| Procter Gamble vs. Victory Integrity Smallmid Cap | Procter Gamble vs. Hilton Worldwide Holdings | Procter Gamble vs. NVIDIA | Procter Gamble vs. JPMorgan Chase Co |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |