Correlation Between SEALED AIR and TOTAL GABON
Can any of the company-specific risk be diversified away by investing in both SEALED AIR and TOTAL GABON 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 TOTAL GABON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and TOTAL GABON, you can compare the effects of market volatilities on SEALED AIR and TOTAL GABON 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 TOTAL GABON. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and TOTAL GABON.
Diversification Opportunities for SEALED AIR and TOTAL GABON
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SEALED and TOTAL is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and TOTAL GABON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL GABON 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 TOTAL GABON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL GABON has no effect on the direction of SEALED AIR i.e., SEALED AIR and TOTAL GABON go up and down completely randomly.
Pair Corralation between SEALED AIR and TOTAL GABON
Assuming the 90 days trading horizon SEALED AIR is expected to generate 3.74 times less return on investment than TOTAL GABON. But when comparing it to its historical volatility, SEALED AIR is 2.3 times less risky than TOTAL GABON. It trades about 0.12 of its potential returns per unit of risk. TOTAL GABON is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 15,800 in TOTAL GABON on September 5, 2024 and sell it today you would earn a total of 2,700 from holding TOTAL GABON or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
SEALED AIR vs. TOTAL GABON
Performance |
| Timeline |
| SEALED AIR |
| TOTAL GABON |
SEALED AIR and TOTAL GABON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and TOTAL GABON
The main advantage of trading using opposite SEALED AIR and TOTAL GABON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR position performs unexpectedly, TOTAL GABON 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 TOTAL GABON will offset losses from the drop in TOTAL GABON's long position.| SEALED AIR vs. TOTAL GABON | SEALED AIR vs. Walgreens Boots Alliance | SEALED AIR vs. Peak Resources Limited |
| TOTAL GABON vs. ELMOS SEMICONDUCTOR | TOTAL GABON vs. Flutter Entertainment PLC | TOTAL GABON vs. REMEDY ENTERTAINMENT OYJ | TOTAL GABON vs. Universal Entertainment |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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