Correlation Between Sealed Air and Deutsche Post

Can any of the company-specific risk be diversified away by investing in both Sealed Air and Deutsche Post 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 Deutsche Post into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sealed Air Corp and Deutsche Post AG, you can compare the effects of market volatilities on Sealed Air and Deutsche Post 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 Deutsche Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Deutsche Post.

Diversification Opportunities for Sealed Air and Deutsche Post

-0.53

Correlation Coefficient

Sealed Air  Deutsche Post

Excellent diversification

The 3 months correlation between Sealed and Deutsche is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG 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 Corp are associated (or correlated) with Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of Sealed Air i.e., Sealed Air and Deutsche Post go up and down completely randomly.

Pair Corralation between Sealed Air and Deutsche Post

Assuming the 90 days trading horizon Sealed Air Corp is expected to generate 0.88 times more return on investment than Deutsche Post. However, Sealed Air Corp is 1.13 times less risky than Deutsche Post. It trades about 0.08 of its potential returns per unit of risk. Deutsche Post AG is currently generating about -0.13 per unit of risk. If you would invest  3,424  in Sealed Air Corp on September 18, 2024 and sell it today you would earn a total of  212.00  from holding Sealed Air Corp or generate 6.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Sealed Air Corp  vs.  Deutsche Post AG

Sealed Air Corp

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sealed Air Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sealed Air may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Deutsche Post AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Post AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sealed Air and Deutsche Post

The main advantage of trading using opposite Sealed Air and Deutsche Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Deutsche Post 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 Deutsche Post will offset losses from the drop in Deutsche Post's long position.

The idea behind Sealed Air Corp and Deutsche Post AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..