Correlation Between Sealed Air and National Beverage
Can any of the company-specific risk be diversified away by investing in both Sealed Air and National Beverage 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 National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and National Beverage Corp, you can compare the effects of market volatilities on Sealed Air and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and National Beverage.
Diversification Opportunities for Sealed Air and National Beverage
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and National is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Sealed Air i.e., Sealed Air and National Beverage go up and down completely randomly.
Pair Corralation between Sealed Air and National Beverage
Considering the 90-day investment horizon Sealed Air is expected to generate 0.63 times more return on investment than National Beverage. However, Sealed Air is 1.59 times less risky than National Beverage. It trades about 0.08 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.12 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. National Beverage Corp
Performance |
| Timeline |
| Sealed Air |
| National Beverage Corp |
Sealed Air and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and National Beverage
The main advantage of trading using opposite Sealed Air and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage'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 |
| National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper | National Beverage vs. Embotelladora Andina SA | National Beverage vs. Coca Cola European Partners |
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 Stocks Directory module to find actively traded stocks across global markets.
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