Correlation Between Sealed Air and Boston Beer
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Boston Beer 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 Boston Beer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Boston Beer, you can compare the effects of market volatilities on Sealed Air and Boston Beer 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 Boston Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Boston Beer.
Diversification Opportunities for Sealed Air and Boston Beer
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Boston is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Boston Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Beer 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 Boston Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Beer has no effect on the direction of Sealed Air i.e., Sealed Air and Boston Beer go up and down completely randomly.
Pair Corralation between Sealed Air and Boston Beer
Considering the 90-day investment horizon Sealed Air is expected to under-perform the Boston Beer. But the stock apears to be less risky and, when comparing its historical volatility, Sealed Air is 1.15 times less risky than Boston Beer. The stock trades about -0.02 of its potential returns per unit of risk. The Boston Beer is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 35,902 in Boston Beer on August 28, 2024 and sell it today you would lose (4,371) from holding Boston Beer or give up 12.17% 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. Boston Beer
Performance |
| Timeline |
| Sealed Air |
| Boston Beer |
Sealed Air and Boston Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Boston Beer
The main advantage of trading using opposite Sealed Air and Boston Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Boston Beer 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 Boston Beer will offset losses from the drop in Boston Beer's long position.| Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Reynolds Consumer Products | Sealed Air vs. Ball Corporation |
| Boston Beer vs. Budweiser Brewing | Boston Beer vs. Anheuser Busch InBev SANV | Boston Beer vs. Ambev SA ADR | Boston Beer vs. Fomento Economico Mexicano |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |