Correlation Between Sealed Air and Unilever

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

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

Diversification Opportunities for Sealed Air and Unilever

0.0

Correlation Coefficient

Sealed Air  Unilever

Pay attention - limited upside

The 3 months correlation between Sealed and Unilever is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and The Unilever Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever Group 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 Unilever. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Group has no effect on the direction of Sealed Air i.e., Sealed Air and Unilever go up and down completely randomly.

Pair Corralation between Sealed Air and Unilever

If you would invest  3,584  in Sealed Air on March 7, 2024 and sell it today you would earn a total of  422.00  from holding Sealed Air or generate 11.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sealed Air  vs.  The Unilever Group

Sealed Air

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sealed Air are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Sealed Air may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Unilever Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Unilever Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Unilever is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sealed Air and Unilever

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

The idea behind Sealed Air and The Unilever Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.