Correlation Between Vietnam Enterprise and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Vietnam Enterprise 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 Vietnam Enterprise and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vietnam Enterprise Investments and Sealed Air Corp, you can compare the effects of market volatilities on Vietnam Enterprise 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 Vietnam Enterprise with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vietnam Enterprise and Sealed Air.
Diversification Opportunities for Vietnam Enterprise and Sealed Air
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vietnam and Sealed is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vietnam Enterprise Investments and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp and Vietnam Enterprise 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 Vietnam Enterprise Investments 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 Corp has no effect on the direction of Vietnam Enterprise i.e., Vietnam Enterprise and Sealed Air go up and down completely randomly.
Pair Corralation between Vietnam Enterprise and Sealed Air
Assuming the 90 days trading horizon Vietnam Enterprise Investments is expected to generate 0.52 times more return on investment than Sealed Air. However, Vietnam Enterprise Investments is 1.94 times less risky than Sealed Air. It trades about 0.13 of its potential returns per unit of risk. Sealed Air Corp is currently generating about -0.03 per unit of risk. If you would invest 57,600 in Vietnam Enterprise Investments on October 26, 2024 and sell it today you would earn a total of 2,400 from holding Vietnam Enterprise Investments or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.68% |
| Values | Daily Returns |
Vietnam Enterprise Investments vs. Sealed Air Corp
Performance |
| Timeline |
| Vietnam Enterprise |
| Sealed Air Corp |
Vietnam Enterprise and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vietnam Enterprise and Sealed Air
The main advantage of trading using opposite Vietnam Enterprise and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vietnam Enterprise 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.| Vietnam Enterprise vs. SupplyMe Capital PLC | Vietnam Enterprise vs. Premier African Minerals | Vietnam Enterprise vs. SANTANDER UK 8 | Vietnam Enterprise vs. Tower Resources plc |
| Sealed Air vs. Bankers Investment Trust | Sealed Air vs. Dairy Farm International | Sealed Air vs. Scandinavian Tobacco Group | Sealed Air vs. Ecofin Global Utilities |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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