Correlation Between PPHE Hotel and Sealed Air
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel 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 PPHE Hotel and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE Hotel Group and Sealed Air Corp, you can compare the effects of market volatilities on PPHE Hotel 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 PPHE Hotel with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Sealed Air.
Diversification Opportunities for PPHE Hotel and Sealed Air
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PPHE and Sealed is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel 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 PPHE Hotel i.e., PPHE Hotel and Sealed Air go up and down completely randomly.
Pair Corralation between PPHE Hotel and Sealed Air
Assuming the 90 days trading horizon PPHE Hotel Group is expected to generate 0.82 times more return on investment than Sealed Air. However, PPHE Hotel Group is 1.22 times less risky than Sealed Air. It trades about 0.05 of its potential returns per unit of risk. Sealed Air Corp is currently generating about 0.01 per unit of risk. If you would invest 103,500 in PPHE Hotel Group on November 28, 2024 and sell it today you would earn a total of 26,500 from holding PPHE Hotel Group or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.75% |
| Values | Daily Returns |
PPHE Hotel Group vs. Sealed Air Corp
Performance |
| Timeline |
| PPHE Hotel Group |
| Sealed Air Corp |
PPHE Hotel and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and Sealed Air
The main advantage of trading using opposite PPHE Hotel and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel 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.| PPHE Hotel vs. First Class Metals | PPHE Hotel vs. Gaming Realms plc | PPHE Hotel vs. Resolute Mining Limited | PPHE Hotel vs. Empire Metals Limited |
| Sealed Air vs. Schroders Investment Trusts | Sealed Air vs. AMG Advanced Metallurgical | Sealed Air vs. Aurora Investment Trust | Sealed Air vs. BlackRock Frontiers Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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