Correlation Between Sealed Air and O I

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

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

Diversification Opportunities for Sealed Air and O I

0.41

Correlation Coefficient

Sealed Air  O I

Very weak diversification

The 3 months correlation between Sealed and O I is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and O I Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O I Glass 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 O I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O I Glass has no effect on the direction of Sealed Air i.e., Sealed Air and O I go up and down completely randomly.

Pair Corralation between Sealed Air and O I

Considering the 90-day investment horizon Sealed Air is expected to under-perform the O I. But the stock apears to be less risky and, when comparing its historical volatility, Sealed Air is 1.28 times less risky than O I. The stock trades about -0.04 of its potential returns per unit of risk. The O I Glass is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,456  in O I Glass on February 6, 2024 and sell it today you would lose (139.00) from holding O I Glass or give up 9.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Sealed Air  vs.  O I Glass

Sealed Air

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sealed Air are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Sealed Air is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

O I Glass

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days O I Glass has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, O I is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sealed Air and O I

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

The idea behind Sealed Air and O I Glass 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.