Correlation Between SEALED AIR and Workiva
Can any of the company-specific risk be diversified away by investing in both SEALED AIR and Workiva 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 Workiva into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and Workiva, you can compare the effects of market volatilities on SEALED AIR and Workiva 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 Workiva. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and Workiva.
Diversification Opportunities for SEALED AIR and Workiva
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEALED and Workiva is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and Workiva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workiva 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 Workiva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workiva has no effect on the direction of SEALED AIR i.e., SEALED AIR and Workiva go up and down completely randomly.
Pair Corralation between SEALED AIR and Workiva
Assuming the 90 days trading horizon SEALED AIR is expected to generate 2.52 times less return on investment than Workiva. But when comparing it to its historical volatility, SEALED AIR is 1.29 times less risky than Workiva. It trades about 0.03 of its potential returns per unit of risk. Workiva is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,550 in Workiva on September 3, 2024 and sell it today you would earn a total of 1,550 from holding Workiva or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEALED AIR vs. Workiva
Performance |
| Timeline |
| SEALED AIR |
| Workiva |
SEALED AIR and Workiva Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and Workiva
The main advantage of trading using opposite SEALED AIR and Workiva positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR position performs unexpectedly, Workiva 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 Workiva will offset losses from the drop in Workiva's long position.| SEALED AIR vs. KIMBALL ELECTRONICS | SEALED AIR vs. SMA Solar Technology | SEALED AIR vs. Align Technology | SEALED AIR vs. Vishay Intertechnology |
| Workiva vs. Norwegian Air Shuttle | Workiva vs. NTG Nordic Transport | Workiva vs. SEALED AIR | Workiva vs. SYSTEMAIR AB |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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