Correlation Between Sealed Air and Cumulus Media
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Cumulus Media 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 Cumulus Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Cumulus Media Class, you can compare the effects of market volatilities on Sealed Air and Cumulus Media 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 Cumulus Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Cumulus Media.
Diversification Opportunities for Sealed Air and Cumulus Media
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sealed and Cumulus is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Cumulus Media Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumulus Media Class 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 Cumulus Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumulus Media Class has no effect on the direction of Sealed Air i.e., Sealed Air and Cumulus Media go up and down completely randomly.
Pair Corralation between Sealed Air and Cumulus Media
Considering the 90-day investment horizon Sealed Air is expected to generate 0.38 times more return on investment than Cumulus Media. However, Sealed Air is 2.61 times less risky than Cumulus Media. It trades about 0.01 of its potential returns per unit of risk. Cumulus Media Class is currently generating about -0.14 per unit of risk. If you would invest 3,557 in Sealed Air on September 19, 2024 and sell it today you would lose (3.00) from holding Sealed Air or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Cumulus Media Class
Performance |
| Timeline |
| Sealed Air |
| Cumulus Media Class |
Sealed Air and Cumulus Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Cumulus Media
The main advantage of trading using opposite Sealed Air and Cumulus Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Cumulus Media 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 Cumulus Media will offset losses from the drop in Cumulus Media'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 |
| Cumulus Media vs. Marchex | Cumulus Media vs. Direct Digital Holdings | Cumulus Media vs. Cimpress NV | Cumulus Media vs. Emerald Expositions Events |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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