Correlation Between Sealed Air and Lear

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

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

Diversification Opportunities for Sealed Air and Lear

0.29

Correlation Coefficient

Sealed Air  Lear

Modest diversification

The 3 months correlation between Sealed and Lear is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and Lear Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lear 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 Lear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lear has no effect on the direction of Sealed Air i.e., Sealed Air and Lear go up and down completely randomly.

Pair Corralation between Sealed Air and Lear

Considering the 90-day investment horizon Sealed Air is expected to generate 1.06 times more return on investment than Lear. However, Sealed Air is 1.06 times more volatile than Lear Corporation. It trades about 0.12 of its potential returns per unit of risk. Lear Corporation is currently generating about 0.12 per unit of risk. If you would invest  2,978  in Sealed Air on August 5, 2025 and sell it today you would earn a total of  373.00  from holding Sealed Air or generate 12.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sealed Air  vs.  Lear Corp.

Sealed Air

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Sealed Air are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Sealed Air may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Lear

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Lear Corporation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Lear may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Sealed Air and Lear

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

The idea behind Sealed Air and Lear Corporation 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.