Correlation Between US FOODS and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both US FOODS 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 US FOODS and SEALED AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US FOODS HOLDING and SEALED AIR , you can compare the effects of market volatilities on US FOODS 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 US FOODS with a short position of SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of US FOODS and SEALED AIR.
Diversification Opportunities for US FOODS and SEALED AIR
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UFH and SEALED is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding US FOODS HOLDING and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR and US FOODS 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 US FOODS HOLDING 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 US FOODS i.e., US FOODS and SEALED AIR go up and down completely randomly.
Pair Corralation between US FOODS and SEALED AIR
Assuming the 90 days trading horizon US FOODS HOLDING is expected to generate 0.81 times more return on investment than SEALED AIR. However, US FOODS HOLDING is 1.24 times less risky than SEALED AIR. It trades about 0.13 of its potential returns per unit of risk. SEALED AIR is currently generating about 0.01 per unit of risk. If you would invest 4,420 in US FOODS HOLDING on November 7, 2024 and sell it today you would earn a total of 2,430 from holding US FOODS HOLDING or generate 54.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
US FOODS HOLDING vs. SEALED AIR
Performance |
| Timeline |
| US FOODS HOLDING |
| SEALED AIR |
US FOODS and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US FOODS and SEALED AIR
The main advantage of trading using opposite US FOODS and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US FOODS 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.| US FOODS vs. ON SEMICONDUCTOR | US FOODS vs. ADRIATIC METALS LS 013355 | US FOODS vs. BE Semiconductor Industries | US FOODS vs. DAIDO METAL TD |
| SEALED AIR vs. Playtech plc | SEALED AIR vs. Firan Technology Group | SEALED AIR vs. National Retail Properties | SEALED AIR vs. CARSALESCOM |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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