Correlation Between AptarGroup and Sonoco Products
Can any of the company-specific risk be diversified away by investing in both AptarGroup and Sonoco Products 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 AptarGroup and Sonoco Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptarGroup and Sonoco Products, you can compare the effects of market volatilities on AptarGroup and Sonoco Products 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 AptarGroup with a short position of Sonoco Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptarGroup and Sonoco Products.
Diversification Opportunities for AptarGroup and Sonoco Products
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AptarGroup and Sonoco is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Sonoco Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoco Products and AptarGroup 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 AptarGroup are associated (or correlated) with Sonoco Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonoco Products has no effect on the direction of AptarGroup i.e., AptarGroup and Sonoco Products go up and down completely randomly.
Pair Corralation between AptarGroup and Sonoco Products
Considering the 90-day investment horizon AptarGroup is expected to generate 0.83 times more return on investment than Sonoco Products. However, AptarGroup is 1.2 times less risky than Sonoco Products. It trades about 0.08 of its potential returns per unit of risk. Sonoco Products is currently generating about -0.01 per unit of risk. If you would invest 10,686 in AptarGroup on November 1, 2024 and sell it today you would earn a total of 5,062 from holding AptarGroup or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
AptarGroup vs. Sonoco Products
Performance |
| Timeline |
| AptarGroup |
| Sonoco Products |
AptarGroup and Sonoco Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptarGroup and Sonoco Products
The main advantage of trading using opposite AptarGroup and Sonoco Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptarGroup position performs unexpectedly, Sonoco Products 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 Sonoco Products will offset losses from the drop in Sonoco Products' long position.| AptarGroup vs. Haemonetics | AptarGroup vs. Merit Medical Systems | AptarGroup vs. AngioDynamics | AptarGroup vs. Envista Holdings Corp |
| Sonoco Products vs. AptarGroup | Sonoco Products vs. Silgan Holdings | Sonoco Products vs. RPM International | Sonoco Products vs. Packaging Corp of |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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