Correlation Between SEALED AIR and Abbott Laboratories
Can any of the company-specific risk be diversified away by investing in both SEALED AIR and Abbott Laboratories 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 Abbott Laboratories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and Abbott Laboratories, you can compare the effects of market volatilities on SEALED AIR and Abbott Laboratories 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 Abbott Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and Abbott Laboratories.
Diversification Opportunities for SEALED AIR and Abbott Laboratories
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEALED and Abbott is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and Abbott Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbott Laboratories 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 Abbott Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbott Laboratories has no effect on the direction of SEALED AIR i.e., SEALED AIR and Abbott Laboratories go up and down completely randomly.
Pair Corralation between SEALED AIR and Abbott Laboratories
Assuming the 90 days trading horizon SEALED AIR is expected to under-perform the Abbott Laboratories. In addition to that, SEALED AIR is 1.55 times more volatile than Abbott Laboratories. It trades about -0.03 of its total potential returns per unit of risk. Abbott Laboratories is currently generating about 0.02 per unit of volatility. If you would invest 9,881 in Abbott Laboratories on September 25, 2024 and sell it today you would earn a total of 1,081 from holding Abbott Laboratories or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SEALED AIR vs. Abbott Laboratories
Performance |
| Timeline |
| SEALED AIR |
| Abbott Laboratories |
SEALED AIR and Abbott Laboratories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and Abbott Laboratories
The main advantage of trading using opposite SEALED AIR and Abbott Laboratories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR position performs unexpectedly, Abbott Laboratories 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 Abbott Laboratories will offset losses from the drop in Abbott Laboratories' long position.| SEALED AIR vs. Wyndham Hotels Resorts | SEALED AIR vs. Dairy Farm International | SEALED AIR vs. Meli Hotels International | SEALED AIR vs. HYATT HOTELS A |
| Abbott Laboratories vs. Direct Line Insurance | Abbott Laboratories vs. The Hanover Insurance | Abbott Laboratories vs. QBE Insurance Group | Abbott Laboratories vs. United Insurance Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |