Correlation Between SEALED AIR and INNELEC MULTIMMINHEO153
Can any of the company-specific risk be diversified away by investing in both SEALED AIR and INNELEC MULTIMMINHEO153 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 INNELEC MULTIMMINHEO153 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and INNELEC MULTIMMINHEO153, you can compare the effects of market volatilities on SEALED AIR and INNELEC MULTIMMINHEO153 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 INNELEC MULTIMMINHEO153. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and INNELEC MULTIMMINHEO153.
Diversification Opportunities for SEALED AIR and INNELEC MULTIMMINHEO153
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SEALED and INNELEC is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and INNELEC MULTIMMINHEO153 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNELEC MULTIMMINHEO153 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 INNELEC MULTIMMINHEO153. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNELEC MULTIMMINHEO153 has no effect on the direction of SEALED AIR i.e., SEALED AIR and INNELEC MULTIMMINHEO153 go up and down completely randomly.
Pair Corralation between SEALED AIR and INNELEC MULTIMMINHEO153
Assuming the 90 days trading horizon SEALED AIR is expected to generate 0.53 times more return on investment than INNELEC MULTIMMINHEO153. However, SEALED AIR is 1.88 times less risky than INNELEC MULTIMMINHEO153. It trades about 0.23 of its potential returns per unit of risk. INNELEC MULTIMMINHEO153 is currently generating about -0.21 per unit of risk. If you would invest 3,261 in SEALED AIR on September 12, 2024 and sell it today you would earn a total of 239.00 from holding SEALED AIR or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEALED AIR vs. INNELEC MULTIMMINHEO153
Performance |
| Timeline |
| SEALED AIR |
| INNELEC MULTIMMINHEO153 |
SEALED AIR and INNELEC MULTIMMINHEO153 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and INNELEC MULTIMMINHEO153
The main advantage of trading using opposite SEALED AIR and INNELEC MULTIMMINHEO153 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR position performs unexpectedly, INNELEC MULTIMMINHEO153 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 INNELEC MULTIMMINHEO153 will offset losses from the drop in INNELEC MULTIMMINHEO153's long position.The idea behind SEALED AIR and INNELEC MULTIMMINHEO153 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| INNELEC MULTIMMINHEO153 vs. Arrow Electronics | INNELEC MULTIMMINHEO153 vs. DICKER DATA LTD | INNELEC MULTIMMINHEO153 vs. KAGA EL LTD | INNELEC MULTIMMINHEO153 vs. Wayside Technology Group |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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