Correlation Between Sealed Air and Suburban Propane
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Suburban Propane 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 Suburban Propane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and Suburban Propane Partners, you can compare the effects of market volatilities on Sealed Air and Suburban Propane 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 Suburban Propane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Suburban Propane.
Diversification Opportunities for Sealed Air and Suburban Propane
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sealed and Suburban is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Suburban Propane Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suburban Propane Partners 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 Suburban Propane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suburban Propane Partners has no effect on the direction of Sealed Air i.e., Sealed Air and Suburban Propane go up and down completely randomly.
Pair Corralation between Sealed Air and Suburban Propane
Considering the 90-day investment horizon Sealed Air is expected to under-perform the Suburban Propane. But the stock apears to be less risky and, when comparing its historical volatility, Sealed Air is 1.03 times less risky than Suburban Propane. The stock trades about -0.02 of its potential returns per unit of risk. The Suburban Propane Partners is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,951 in Suburban Propane Partners on September 1, 2024 and sell it today you would earn a total of 34.00 from holding Suburban Propane Partners or generate 1.74% 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. Suburban Propane Partners
Performance |
| Timeline |
| Sealed Air |
| Suburban Propane Partners |
Sealed Air and Suburban Propane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and Suburban Propane
The main advantage of trading using opposite Sealed Air and Suburban Propane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Suburban Propane 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 Suburban Propane will offset losses from the drop in Suburban Propane's long position.| Sealed Air vs. Packaging Corp of | Sealed Air vs. O I Glass | Sealed Air vs. Silgan Holdings | Sealed Air vs. International Paper |
| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. Atmos Energy | Suburban Propane vs. One Gas | Suburban Propane vs. NiSource |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |