Correlation Between Crown Holdings and Greif Bros
Can any of the company-specific risk be diversified away by investing in both Crown Holdings 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 Crown Holdings and Greif Bros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Holdings and Greif Bros, you can compare the effects of market volatilities on Crown Holdings 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 Crown Holdings with a short position of Greif Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Holdings and Greif Bros.
Diversification Opportunities for Crown Holdings and Greif Bros
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Crown and Greif is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Crown Holdings and Greif Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Bros and Crown Holdings 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 Crown Holdings 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 Crown Holdings i.e., Crown Holdings and Greif Bros go up and down completely randomly.
Pair Corralation between Crown Holdings and Greif Bros
Considering the 90-day investment horizon Crown Holdings is expected to generate 1.01 times more return on investment than Greif Bros. However, Crown Holdings is 1.01 times more volatile than Greif Bros. It trades about 0.03 of its potential returns per unit of risk. Greif Bros is currently generating about 0.02 per unit of risk. If you would invest 7,886 in Crown Holdings on August 28, 2024 and sell it today you would earn a total of 1,376 from holding Crown Holdings or generate 17.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Holdings vs. Greif Bros
Performance |
| Timeline |
| Crown Holdings |
| Greif Bros |
Crown Holdings and Greif Bros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Holdings and Greif Bros
The main advantage of trading using opposite Crown Holdings and Greif Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Holdings 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.| Crown Holdings vs. AptarGroup | Crown Holdings vs. Sonoco Products | Crown Holdings vs. Graphic Packaging Holding |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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