Correlation Between Graphic Packaging and Vidrala SA
Can any of the company-specific risk be diversified away by investing in both Graphic Packaging and Vidrala SA 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 Vidrala SA 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 Vidrala SA, you can compare the effects of market volatilities on Graphic Packaging and Vidrala SA 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 Vidrala SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphic Packaging and Vidrala SA.
Diversification Opportunities for Graphic Packaging and Vidrala SA
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Graphic and Vidrala is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Graphic Packaging Holding and Vidrala SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vidrala SA 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 Vidrala SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vidrala SA has no effect on the direction of Graphic Packaging i.e., Graphic Packaging and Vidrala SA go up and down completely randomly.
Pair Corralation between Graphic Packaging and Vidrala SA
Assuming the 90 days horizon Graphic Packaging Holding is expected to generate 1.03 times more return on investment than Vidrala SA. However, Graphic Packaging is 1.03 times more volatile than Vidrala SA. It trades about 0.08 of its potential returns per unit of risk. Vidrala SA is currently generating about 0.08 per unit of risk. If you would invest 2,002 in Graphic Packaging Holding on September 15, 2024 and sell it today you would earn a total of 792.00 from holding Graphic Packaging Holding or generate 39.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphic Packaging Holding vs. Vidrala SA
Performance |
| Timeline |
| Graphic Packaging Holding |
| Vidrala SA |
Graphic Packaging and Vidrala SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphic Packaging and Vidrala SA
The main advantage of trading using opposite Graphic Packaging and Vidrala SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphic Packaging position performs unexpectedly, Vidrala SA 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 Vidrala SA will offset losses from the drop in Vidrala SA's long position.| Graphic Packaging vs. MARKET VECTR RETAIL | Graphic Packaging vs. COSTCO WHOLESALE CDR | Graphic Packaging vs. FORMPIPE SOFTWARE AB | Graphic Packaging vs. BJs Wholesale Club |
| Vidrala SA vs. Packaging of | Vidrala SA vs. Graphic Packaging Holding | Vidrala SA vs. Superior Plus Corp | Vidrala SA vs. SIVERS SEMICONDUCTORS AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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