Correlation Between SEALED AIR and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both SEALED AIR and Stag Industrial 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 Stag Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEALED AIR and Stag Industrial, you can compare the effects of market volatilities on SEALED AIR and Stag Industrial 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 Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEALED AIR and Stag Industrial.
Diversification Opportunities for SEALED AIR and Stag Industrial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SEALED and Stag is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SEALED AIR and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial 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 Stag Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stag Industrial has no effect on the direction of SEALED AIR i.e., SEALED AIR and Stag Industrial go up and down completely randomly.
Pair Corralation between SEALED AIR and Stag Industrial
Assuming the 90 days trading horizon SEALED AIR is expected to generate 0.73 times more return on investment than Stag Industrial. However, SEALED AIR is 1.37 times less risky than Stag Industrial. It trades about -0.2 of its potential returns per unit of risk. Stag Industrial is currently generating about -0.15 per unit of risk. If you would invest 3,400 in SEALED AIR on October 17, 2024 and sell it today you would lose (140.00) from holding SEALED AIR or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
SEALED AIR vs. Stag Industrial
Performance |
| Timeline |
| SEALED AIR |
| Stag Industrial |
SEALED AIR and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEALED AIR and Stag Industrial
The main advantage of trading using opposite SEALED AIR and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEALED AIR position performs unexpectedly, Stag Industrial 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 Stag Industrial will offset losses from the drop in Stag Industrial's long position.| SEALED AIR vs. THAI BEVERAGE | SEALED AIR vs. China Resources Beer | SEALED AIR vs. Canadian Utilities Limited | SEALED AIR vs. UNITED UTILITIES GR |
| Stag Industrial vs. SEALED AIR | Stag Industrial vs. Lery Seafood Group | Stag Industrial vs. WIZZ AIR HLDGUNSPADR4 | Stag Industrial vs. CHINA SOUTHN AIR H |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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