Correlation Between Bell Food and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Bell Food 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 Bell Food and Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bell Food Group and Sealed Air Corp, you can compare the effects of market volatilities on Bell Food 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 Bell Food with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bell Food and Sealed Air.
Diversification Opportunities for Bell Food and Sealed Air
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bell and Sealed is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bell Food Group 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 Bell Food 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 Bell Food Group 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 Bell Food i.e., Bell Food and Sealed Air go up and down completely randomly.
Pair Corralation between Bell Food and Sealed Air
Assuming the 90 days trading horizon Bell Food Group is expected to under-perform the Sealed Air. But the stock apears to be less risky and, when comparing its historical volatility, Bell Food Group is 2.88 times less risky than Sealed Air. The stock trades about -0.02 of its potential returns per unit of risk. The Sealed Air Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,290 in Sealed Air Corp on September 13, 2024 and sell it today you would earn a total of 336.00 from holding Sealed Air Corp or generate 10.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Bell Food Group vs. Sealed Air Corp
Performance |
Timeline |
Bell Food Group |
Sealed Air Corp |
Bell Food and Sealed Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bell Food and Sealed Air
The main advantage of trading using opposite Bell Food and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bell Food 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.Bell Food vs. Samsung Electronics Co | Bell Food vs. Samsung Electronics Co | Bell Food vs. Hyundai Motor | Bell Food vs. Reliance Industries Ltd |
Sealed Air vs. Samsung Electronics Co | Sealed Air vs. Samsung Electronics Co | Sealed Air vs. Hyundai Motor | Sealed Air vs. Reliance Industries Ltd |
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 CEOs Directory module to screen CEOs from public companies around the world.
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