Correlation Between Sealed Air and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Eastman Chemical 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 Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Eastman Chemical, you can compare the effects of market volatilities on Sealed Air and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Eastman Chemical.
Diversification Opportunities for Sealed Air and Eastman Chemical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Eastman is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Sealed Air i.e., Sealed Air and Eastman Chemical go up and down completely randomly.
Pair Corralation between Sealed Air and Eastman Chemical
Considering the 90-day investment horizon Sealed Air is expected to generate 0.95 times more return on investment than Eastman Chemical. However, Sealed Air is 1.05 times less risky than Eastman Chemical. It trades about -0.06 of its potential returns per unit of risk. Eastman Chemical is currently generating about -0.08 per unit of risk. If you would invest 3,632 in Sealed Air on August 24, 2024 and sell it today you would lose (79.00) from holding Sealed Air or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Eastman Chemical
Performance |
| Timeline |
| Sealed Air |
| Eastman Chemical |
Sealed Air and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Eastman Chemical
The main advantage of trading using opposite Sealed Air and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical'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 |
| Eastman Chemical vs. Eshallgo Class A | Eastman Chemical vs. Amtech Systems | Eastman Chemical vs. Gold Fields Ltd | Eastman Chemical vs. Aegean Airlines SA |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |