Correlation Between Avery Dennison and Greif Bros
Can any of the company-specific risk be diversified away by investing in both Avery Dennison and Greif Bros 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 Avery Dennison and Greif Bros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avery Dennison Corp and Greif Bros, you can compare the effects of market volatilities on Avery Dennison and Greif Bros 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 Avery Dennison with a short position of Greif Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avery Dennison and Greif Bros.
Diversification Opportunities for Avery Dennison and Greif Bros
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Avery and Greif is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Avery Dennison Corp and Greif Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Bros and Avery Dennison 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 Avery Dennison Corp are associated (or correlated) with Greif Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Bros has no effect on the direction of Avery Dennison i.e., Avery Dennison and Greif Bros go up and down completely randomly.
Pair Corralation between Avery Dennison and Greif Bros
Considering the 90-day investment horizon Avery Dennison Corp is expected to under-perform the Greif Bros. But the stock apears to be less risky and, when comparing its historical volatility, Avery Dennison Corp is 1.42 times less risky than Greif Bros. The stock trades about -0.06 of its potential returns per unit of risk. The Greif Bros is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,330 in Greif Bros on August 24, 2024 and sell it today you would earn a total of 614.00 from holding Greif Bros or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avery Dennison Corp vs. Greif Bros
Performance |
| Timeline |
| Avery Dennison Corp |
| Greif Bros |
Avery Dennison and Greif Bros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avery Dennison and Greif Bros
The main advantage of trading using opposite Avery Dennison and Greif Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avery Dennison position performs unexpectedly, Greif Bros 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 Greif Bros will offset losses from the drop in Greif Bros' long position.| Avery Dennison vs. Packaging Corp of | Avery Dennison vs. O I Glass | Avery Dennison vs. Silgan Holdings | Avery Dennison vs. Sealed Air |
| Greif Bros vs. Silgan Holdings | Greif Bros vs. AptarGroup | Greif Bros vs. Sonoco Products | Greif Bros vs. Graphic Packaging Holding |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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