Correlation Between Sealed Air and Acme United
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Acme United 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 Acme United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Acme United, you can compare the effects of market volatilities on Sealed Air and Acme United 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 Acme United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Acme United.
Diversification Opportunities for Sealed Air and Acme United
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sealed and Acme is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Acme United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acme United 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 Acme United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acme United has no effect on the direction of Sealed Air i.e., Sealed Air and Acme United go up and down completely randomly.
Pair Corralation between Sealed Air and Acme United
Considering the 90-day investment horizon Sealed Air is expected to generate 1.29 times less return on investment than Acme United. But when comparing it to its historical volatility, Sealed Air is 1.32 times less risky than Acme United. It trades about 0.12 of its potential returns per unit of risk. Acme United is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,219 in Acme United on September 12, 2024 and sell it today you would earn a total of 176.00 from holding Acme United or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Acme United
Performance |
| Timeline |
| Sealed Air |
| Acme United |
Sealed Air and Acme United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Acme United
The main advantage of trading using opposite Sealed Air and Acme United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Acme United 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 Acme United will offset losses from the drop in Acme United's long position.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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