Correlation Between Sealed Air and NEXE Innovations
Can any of the company-specific risk be diversified away by investing in both Sealed Air and NEXE Innovations 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 NEXE Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and NEXE Innovations, you can compare the effects of market volatilities on Sealed Air and NEXE Innovations 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 NEXE Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and NEXE Innovations.
Diversification Opportunities for Sealed Air and NEXE Innovations
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and NEXE is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and NEXE Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXE Innovations 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 NEXE Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXE Innovations has no effect on the direction of Sealed Air i.e., Sealed Air and NEXE Innovations go up and down completely randomly.
Pair Corralation between Sealed Air and NEXE Innovations
Considering the 90-day investment horizon Sealed Air is expected to generate 0.42 times more return on investment than NEXE Innovations. However, Sealed Air is 2.38 times less risky than NEXE Innovations. It trades about 0.04 of its potential returns per unit of risk. NEXE Innovations is currently generating about -0.15 per unit of risk. If you would invest 3,618 in Sealed Air on September 1, 2024 and sell it today you would earn a total of 42.00 from holding Sealed Air or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sealed Air vs. NEXE Innovations
Performance |
| Timeline |
| Sealed Air |
| NEXE Innovations |
Sealed Air and NEXE Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and NEXE Innovations
The main advantage of trading using opposite Sealed Air and NEXE Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, NEXE Innovations 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 NEXE Innovations will offset losses from the drop in NEXE Innovations' long position.| Sealed Air vs. Packaging Corp of | Sealed Air vs. O I Glass | Sealed Air vs. Silgan Holdings | Sealed Air vs. International Paper |
| NEXE Innovations vs. Packaging Corp of | NEXE Innovations vs. International Paper | NEXE Innovations vs. Ball Corporation | NEXE Innovations vs. Amcor plc |
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
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |