Correlation Between Sealed Air and Lionheart Holdings
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Lionheart Holdings 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 Lionheart Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Lionheart Holdings, you can compare the effects of market volatilities on Sealed Air and Lionheart Holdings 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 Lionheart Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Lionheart Holdings.
Diversification Opportunities for Sealed Air and Lionheart Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Lionheart is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Lionheart Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionheart Holdings 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 Lionheart Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionheart Holdings has no effect on the direction of Sealed Air i.e., Sealed Air and Lionheart Holdings go up and down completely randomly.
Pair Corralation between Sealed Air and Lionheart Holdings
Considering the 90-day investment horizon Sealed Air is expected to generate 12.24 times more return on investment than Lionheart Holdings. However, Sealed Air is 12.24 times more volatile than Lionheart Holdings. It trades about 0.08 of its potential returns per unit of risk. Lionheart Holdings is currently generating about 0.33 per unit of risk. If you would invest 3,538 in Sealed Air on September 13, 2024 and sell it today you would earn a total of 72.00 from holding Sealed Air or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Lionheart Holdings
Performance |
| Timeline |
| Sealed Air |
| Lionheart Holdings |
Sealed Air and Lionheart Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Lionheart Holdings
The main advantage of trading using opposite Sealed Air and Lionheart Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Lionheart Holdings 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 Lionheart Holdings will offset losses from the drop in Lionheart Holdings' long position.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| Lionheart Holdings vs. Voyager Acquisition Corp | Lionheart Holdings vs. YHN Acquisition I | Lionheart Holdings vs. YHN Acquisition I | Lionheart Holdings vs. CO2 Energy Transition |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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