Correlation Between SEALED AIR and EURODRY
Can any of the company-specific risk be diversified away by investing in both SEALED AIR and EURODRY 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 SEALED AIR and EURODRY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and EURODRY LTD DL, you can compare the effects of market volatilities on SEALED AIR and EURODRY 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 SEALED AIR with a short position of EURODRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and EURODRY.
Diversification Opportunities for SEALED AIR and EURODRY
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEALED and EURODRY is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and EURODRY LTD DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EURODRY LTD DL and SEALED AIR 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 SEALED AIR are associated (or correlated) with EURODRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EURODRY LTD DL has no effect on the direction of SEALED AIR i.e., SEALED AIR and EURODRY go up and down completely randomly.
Pair Corralation between SEALED AIR and EURODRY
Assuming the 90 days trading horizon SEALED AIR is expected to under-perform the EURODRY. But the stock apears to be less risky and, when comparing its historical volatility, SEALED AIR is 2.17 times less risky than EURODRY. The stock trades about -0.39 of its potential returns per unit of risk. The EURODRY LTD DL is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 1,070 in EURODRY LTD DL on November 28, 2024 and sell it today you would lose (70.00) from holding EURODRY LTD DL or give up 6.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SEALED AIR vs. EURODRY LTD DL
Performance |
| Timeline |
| SEALED AIR |
| EURODRY LTD DL |
SEALED AIR and EURODRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and EURODRY
The main advantage of trading using opposite SEALED AIR and EURODRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR position performs unexpectedly, EURODRY 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 EURODRY will offset losses from the drop in EURODRY's long position.| SEALED AIR vs. Salesforce | SEALED AIR vs. YATRA ONLINE DL 0001 | SEALED AIR vs. CARSALESCOM | SEALED AIR vs. GUILD ESPORTS PLC |
| EURODRY vs. BROADPEAK SA EO | EURODRY vs. Luckin Coffee | EURODRY vs. Transport International Holdings | EURODRY vs. EVS Broadcast Equipment |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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