Correlation Between SEALED AIR and INDUSTRIAL MINERALS
Can any of the company-specific risk be diversified away by investing in both SEALED AIR and INDUSTRIAL MINERALS 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 INDUSTRIAL MINERALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and INDUSTRIAL MINERALS LTD, you can compare the effects of market volatilities on SEALED AIR and INDUSTRIAL MINERALS 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 INDUSTRIAL MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and INDUSTRIAL MINERALS.
Diversification Opportunities for SEALED AIR and INDUSTRIAL MINERALS
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SEALED and INDUSTRIAL is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and INDUSTRIAL MINERALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIAL MINERALS LTD 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 INDUSTRIAL MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIAL MINERALS LTD has no effect on the direction of SEALED AIR i.e., SEALED AIR and INDUSTRIAL MINERALS go up and down completely randomly.
Pair Corralation between SEALED AIR and INDUSTRIAL MINERALS
Assuming the 90 days trading horizon SEALED AIR is expected to generate 0.21 times more return on investment than INDUSTRIAL MINERALS. However, SEALED AIR is 4.75 times less risky than INDUSTRIAL MINERALS. It trades about -0.24 of its potential returns per unit of risk. INDUSTRIAL MINERALS LTD is currently generating about -0.08 per unit of risk. If you would invest 3,420 in SEALED AIR on October 10, 2024 and sell it today you would lose (180.00) from holding SEALED AIR or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEALED AIR vs. INDUSTRIAL MINERALS LTD
Performance |
| Timeline |
| SEALED AIR |
| INDUSTRIAL MINERALS LTD |
SEALED AIR and INDUSTRIAL MINERALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and INDUSTRIAL MINERALS
The main advantage of trading using opposite SEALED AIR and INDUSTRIAL MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR position performs unexpectedly, INDUSTRIAL MINERALS 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 INDUSTRIAL MINERALS will offset losses from the drop in INDUSTRIAL MINERALS's long position.| SEALED AIR vs. STRAYER EDUCATION | SEALED AIR vs. G8 EDUCATION | SEALED AIR vs. DEVRY EDUCATION GRP | SEALED AIR vs. Magnachip Semiconductor |
| INDUSTRIAL MINERALS vs. OBSERVE MEDICAL ASA | INDUSTRIAL MINERALS vs. ADRIATIC METALS LS 013355 | INDUSTRIAL MINERALS vs. FIREWEED METALS P | INDUSTRIAL MINERALS vs. GRIFFIN MINING LTD |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |