Correlation Between Sealed Air and International Paper
Can any of the company-specific risk be diversified away by investing in both Sealed Air and International Paper 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 International Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and International Paper, you can compare the effects of market volatilities on Sealed Air and International Paper 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 International Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and International Paper.
Diversification Opportunities for Sealed Air and International Paper
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sealed and International is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and International Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Paper 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 are associated (or correlated) with International Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Paper has no effect on the direction of Sealed Air i.e., Sealed Air and International Paper go up and down completely randomly.
Pair Corralation between Sealed Air and International Paper
Considering the 90-day investment horizon Sealed Air is expected to under-perform the International Paper. But the stock apears to be less risky and, when comparing its historical volatility, Sealed Air is 1.56 times less risky than International Paper. The stock trades about -0.26 of its potential returns per unit of risk. The International Paper is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,494 in International Paper on January 18, 2024 and sell it today you would earn a total of 97.00 from holding International Paper or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sealed Air vs. International Paper
Performance |
| Timeline |
| Sealed Air |
| International Paper |
Sealed Air and International Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and International Paper
The main advantage of trading using opposite Sealed Air and International Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air position performs unexpectedly, International Paper 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 International Paper will offset losses from the drop in International Paper's long position.| Sealed Air vs. Ball Corporation | Sealed Air vs. O I Glass | Sealed Air vs. Silgan Holdings | Sealed Air vs. Greif Bros |
| International Paper vs. Ball Corporation | International Paper vs. O I Glass | International Paper vs. Silgan Holdings | International Paper vs. Greif Bros |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |