Correlation Between SEALED AIR and G III
Can any of the company-specific risk be diversified away by investing in both SEALED AIR and G III 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 G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and G III Apparel Group, you can compare the effects of market volatilities on SEALED AIR and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and G III.
Diversification Opportunities for SEALED AIR and G III
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SEALED and GI4 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of SEALED AIR i.e., SEALED AIR and G III go up and down completely randomly.
Pair Corralation between SEALED AIR and G III
Assuming the 90 days trading horizon SEALED AIR is expected to generate 0.69 times more return on investment than G III. However, SEALED AIR is 1.45 times less risky than G III. It trades about 0.19 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.03 per unit of risk. If you would invest 3,220 in SEALED AIR on November 4, 2024 and sell it today you would earn a total of 140.00 from holding SEALED AIR or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEALED AIR vs. G III Apparel Group
Performance |
| Timeline |
| SEALED AIR |
| G III Apparel |
SEALED AIR and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and G III
The main advantage of trading using opposite SEALED AIR and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| SEALED AIR vs. MagnaChip Semiconductor Corp | SEALED AIR vs. Martin Marietta Materials | SEALED AIR vs. Vulcan Materials | SEALED AIR vs. Summit Materials |
| G III vs. Delta Electronics Public | G III vs. Nucletron Electronic Aktiengesellschaft | G III vs. AOI Electronics Co | G III vs. ARROW ELECTRONICS |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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