Correlation Between Sealed Air and Science In

Can any of the company-specific risk be diversified away by investing in both Sealed Air and Science In 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 Science In 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 Science in Sport, you can compare the effects of market volatilities on Sealed Air and Science In 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 Science In. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and Science In.

Diversification Opportunities for Sealed Air and Science In

0.61

Correlation Coefficient

Sealed Air  Science In

Poor diversification

The 3 months correlation between Sealed and Science is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air Corp and Science in Sport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science in Sport 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 Science In. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science in Sport has no effect on the direction of Sealed Air i.e., Sealed Air and Science In go up and down completely randomly.

Pair Corralation between Sealed Air and Science In

Assuming the 90 days trading horizon Sealed Air is expected to generate 1.8 times less return on investment than Science In. In addition to that, Sealed Air is 1.09 times more volatile than Science in Sport. It trades about 0.08 of its total potential returns per unit of risk. Science in Sport is currently generating about 0.16 per unit of volatility. If you would invest  2,300  in Science in Sport on September 18, 2024 and sell it today you would earn a total of  300.00  from holding Science in Sport or generate 13.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.31%
Values	Daily Returns

Sealed Air Corp  vs.  Science in Sport

Sealed Air Corp

Risk-Adjusted Performance

6 of 100

Modest

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.

Science in Sport

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Science in Sport are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Science In may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sealed Air and Science In

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

The idea behind Sealed Air Corp and Science in Sport 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.