Correlation Between Sealed Air and Outokumpu Oyj
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Outokumpu Oyj 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 Outokumpu Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Outokumpu Oyj, you can compare the effects of market volatilities on Sealed Air and Outokumpu Oyj 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 Outokumpu Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Outokumpu Oyj.
Diversification Opportunities for Sealed Air and Outokumpu Oyj
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sealed and Outokumpu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Outokumpu Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outokumpu Oyj 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 Outokumpu Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outokumpu Oyj has no effect on the direction of Sealed Air i.e., Sealed Air and Outokumpu Oyj go up and down completely randomly.
Pair Corralation between Sealed Air and Outokumpu Oyj
Considering the 90-day investment horizon Sealed Air is expected to generate 1.71 times more return on investment than Outokumpu Oyj. However, Sealed Air is 1.71 times more volatile than Outokumpu Oyj. It trades about 0.03 of its potential returns per unit of risk. Outokumpu Oyj is currently generating about -0.1 per unit of risk. If you would invest 3,267 in Sealed Air on September 14, 2024 and sell it today you would earn a total of 311.00 from holding Sealed Air or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 71.38% |
| Values | Daily Returns |
Sealed Air vs. Outokumpu Oyj
Performance |
| Timeline |
| Sealed Air |
| Outokumpu Oyj |
Sealed Air and Outokumpu Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Outokumpu Oyj
The main advantage of trading using opposite Sealed Air and Outokumpu Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Outokumpu Oyj 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 Outokumpu Oyj will offset losses from the drop in Outokumpu Oyj'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 |
| Outokumpu Oyj vs. Weyco Group | Outokumpu Oyj vs. Microbot Medical | Outokumpu Oyj vs. Sphere Entertainment Co | Outokumpu Oyj vs. Sealed Air |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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