Correlation Between Fresh Grapes and Sealed Air

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

By analyzing existing cross correlation between Fresh Grapes LLC and Sealed Air, you can compare the effects of market volatilities on Fresh Grapes 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 Fresh Grapes with a short position of Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Grapes and Sealed Air.

Diversification Opportunities for Fresh Grapes and Sealed Air

0.62

Correlation Coefficient

Fresh Grapes  Sealed Air

Poor diversification

The 3 months correlation between Fresh and Sealed is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Grapes LLC and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air and Fresh Grapes 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 Fresh Grapes LLC 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 has no effect on the direction of Fresh Grapes i.e., Fresh Grapes and Sealed Air go up and down completely randomly.

Pair Corralation between Fresh Grapes and Sealed Air

Given the investment horizon of 90 days Fresh Grapes LLC is expected to under-perform the Sealed Air. In addition to that, Fresh Grapes is 3.04 times more volatile than Sealed Air. It trades about -0.12 of its total potential returns per unit of risk. Sealed Air is currently generating about -0.37 per unit of volatility. If you would invest  3,720  in Sealed Air on January 29, 2024 and sell it today you would lose (546.00) from holding Sealed Air or give up 14.68% of portfolio value over 90 days.

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

Fresh Grapes LLC  vs.  Sealed Air

Fresh Grapes LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresh Grapes LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sealed Air

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sealed Air has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Fresh Grapes and Sealed Air

The main advantage of trading using opposite Fresh Grapes and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Grapes 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.

The idea behind Fresh Grapes LLC and Sealed Air 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.