Correlation Between Good Natured and Sonoco Products
Can any of the company-specific risk be diversified away by investing in both Good Natured 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 Good Natured and Sonoco Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between good natured Products and Sonoco Products, you can compare the effects of market volatilities on Good Natured 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 Good Natured with a short position of Sonoco Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Good Natured and Sonoco Products.
Diversification Opportunities for Good Natured and Sonoco Products
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Good and Sonoco is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding good natured Products and Sonoco Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoco Products and Good Natured 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 good natured Products 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 Good Natured i.e., Good Natured and Sonoco Products go up and down completely randomly.
Pair Corralation between Good Natured and Sonoco Products
Assuming the 90 days horizon good natured Products is expected to generate 1.56 times more return on investment than Sonoco Products. However, Good Natured is 1.56 times more volatile than Sonoco Products. It trades about 0.23 of its potential returns per unit of risk. Sonoco Products is currently generating about 0.0 per unit of risk. If you would invest 0.50 in good natured Products on September 1, 2024 and sell it today you would earn a total of 0.04 from holding good natured Products or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
good natured Products vs. Sonoco Products
Performance |
| Timeline |
| good natured Products |
| Sonoco Products |
Good Natured and Sonoco Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Good Natured and Sonoco Products
The main advantage of trading using opposite Good Natured and Sonoco Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Good Natured 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.| Good Natured vs. Packaging Corp of | Good Natured vs. International Paper | Good Natured vs. Ball Corporation | Good Natured vs. Amcor plc |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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