Correlation Between Sealed Air and Universal Health

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Sealed Air and Universal Health 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 Universal Health 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 Universal Health Services, you can compare the effects of market volatilities on Sealed Air and Universal Health 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 Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Universal Health.

Diversification Opportunities for Sealed Air and Universal Health

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Sealed and Universal is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services 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 Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of Sealed Air i.e., Sealed Air and Universal Health go up and down completely randomly.

Pair Corralation between Sealed Air and Universal Health

Assuming the 90 days trading horizon Sealed Air Corp is expected to generate 0.62 times more return on investment than Universal Health. However, Sealed Air Corp is 1.61 times less risky than Universal Health. It trades about -0.03 of its potential returns per unit of risk. Universal Health Services is currently generating about -0.2 per unit of risk. If you would invest  3,524  in Sealed Air Corp on September 24, 2024 and sell it today you would lose (108.00) from holding Sealed Air Corp or give up 3.06% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.31%
ValuesDaily Returns

Sealed Air Corp  vs.  Universal Health Services

 Performance 
       Timeline  
Sealed Air Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sealed Air Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sealed Air is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
Universal Health Services 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Universal Health Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sealed Air and Universal Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sealed Air and Universal Health

The main advantage of trading using opposite Sealed Air and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.
The idea behind Sealed Air Corp and Universal Health Services 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.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Transaction History
View history of all your transactions and understand their impact on performance
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.