Correlation Between Graphic Packaging and Packaging
Can any of the company-specific risk be diversified away by investing in both Graphic Packaging and Packaging 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 Graphic Packaging and Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphic Packaging Holding and Packaging of, you can compare the effects of market volatilities on Graphic Packaging and Packaging 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 Graphic Packaging with a short position of Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphic Packaging and Packaging.
Diversification Opportunities for Graphic Packaging and Packaging
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Graphic and Packaging is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Graphic Packaging Holding and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging and Graphic Packaging 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 Graphic Packaging Holding are associated (or correlated) with Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging has no effect on the direction of Graphic Packaging i.e., Graphic Packaging and Packaging go up and down completely randomly.
Pair Corralation between Graphic Packaging and Packaging
Assuming the 90 days horizon Graphic Packaging Holding is expected to generate 1.26 times more return on investment than Packaging. However, Graphic Packaging is 1.26 times more volatile than Packaging of. It trades about 0.09 of its potential returns per unit of risk. Packaging of is currently generating about 0.04 per unit of risk. If you would invest 2,726 in Graphic Packaging Holding on September 13, 2024 and sell it today you would earn a total of 59.00 from holding Graphic Packaging Holding or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphic Packaging Holding vs. Packaging of
Performance |
| Timeline |
| Graphic Packaging Holding |
| Packaging |
Graphic Packaging and Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphic Packaging and Packaging
The main advantage of trading using opposite Graphic Packaging and Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphic Packaging position performs unexpectedly, Packaging 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 Packaging will offset losses from the drop in Packaging's long position.| Graphic Packaging vs. DALATA HOTEL | Graphic Packaging vs. HYATT HOTELS A | Graphic Packaging vs. Carsales | Graphic Packaging vs. Choice Hotels International |
| Packaging vs. ADRIATIC METALS LS 013355 | Packaging vs. Scientific Games | Packaging vs. Evolution Mining Limited | Packaging vs. TSOGO SUN GAMING |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |