Correlation Between Suburban Propane and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Suburban Propane and Sealed Air 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 Suburban Propane and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suburban Propane Partners and Sealed Air, you can compare the effects of market volatilities on Suburban Propane and Sealed Air 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 Suburban Propane with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and Sealed Air.
Diversification Opportunities for Suburban Propane and Sealed Air
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Suburban and Sealed is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and Suburban Propane 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 Suburban Propane Partners are associated (or correlated) with Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air has no effect on the direction of Suburban Propane i.e., Suburban Propane and Sealed Air go up and down completely randomly.
Pair Corralation between Suburban Propane and Sealed Air
Considering the 90-day investment horizon Suburban Propane Partners is expected to generate 0.84 times more return on investment than Sealed Air. However, Suburban Propane Partners is 1.19 times less risky than Sealed Air. It trades about 0.05 of its potential returns per unit of risk. Sealed Air is currently generating about -0.02 per unit of risk. If you would invest 1,371 in Suburban Propane Partners on August 30, 2024 and sell it today you would earn a total of 564.00 from holding Suburban Propane Partners or generate 41.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suburban Propane Partners vs. Sealed Air
Performance |
| Timeline |
| Suburban Propane Partners |
| Sealed Air |
Suburban Propane and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suburban Propane and Sealed Air
The main advantage of trading using opposite Suburban Propane and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Suburban Propane vs. Northwest Natural Gas | Suburban Propane vs. NewJersey Resources | Suburban Propane vs. Atmos Energy | Suburban Propane vs. Chesapeake Utilities |
| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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