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
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sealed and Lear is 0.61. 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 under-perform the Lear. But the stock apears to be less risky and, when comparing its historical volatility, Sealed Air is 4.38 times less risky than Lear. The stock trades about -0.07 of its potential returns per unit of risk. The Lear Corporation is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 10,700 in Lear Corporation on October 6, 2025 and sell it today you would earn a total of 1,161 from holding Lear Corporation or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. Lear Corp.
Performance |
| Timeline |
| Sealed Air |
| Lear |
Sealed Air and Lear Volatility Contrast
Predicted Return Density |
| Returns |
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.| Sealed Air vs. Reynolds Consumer Products | Sealed Air vs. Graphic Packaging Holding | Sealed Air vs. Silgan Holdings | Sealed Air vs. Sonoco Products |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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