Correlation Between Sealed Air and TFI International
Can any of the company-specific risk be diversified away by investing in both Sealed Air and TFI International 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 TFI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and TFI International, you can compare the effects of market volatilities on Sealed Air and TFI International 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 TFI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and TFI International.
Diversification Opportunities for Sealed Air and TFI International
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sealed and TFI is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International 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 TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Sealed Air i.e., Sealed Air and TFI International go up and down completely randomly.
Pair Corralation between Sealed Air and TFI International
Considering the 90-day investment horizon Sealed Air is expected to generate 11.46 times less return on investment than TFI International. But when comparing it to its historical volatility, Sealed Air is 1.75 times less risky than TFI International. It trades about 0.04 of its potential returns per unit of risk. TFI International is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 13,429 in TFI International on September 3, 2024 and sell it today you would earn a total of 1,739 from holding TFI International or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. TFI International
Performance |
| Timeline |
| Sealed Air |
| TFI International |
Sealed Air and TFI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and TFI International
The main advantage of trading using opposite Sealed Air and TFI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, TFI International 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 TFI International will offset losses from the drop in TFI International'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 |
| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
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 Positions Ratings module to 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.
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