Correlation Between Greif Bros and AptarGroup
Can any of the company-specific risk be diversified away by investing in both Greif Bros and AptarGroup 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 Greif Bros and AptarGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greif Bros and AptarGroup, you can compare the effects of market volatilities on Greif Bros and AptarGroup 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 Greif Bros with a short position of AptarGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greif Bros and AptarGroup.
Diversification Opportunities for Greif Bros and AptarGroup
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greif and AptarGroup is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Greif Bros and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Greif Bros 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 Greif Bros are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of Greif Bros i.e., Greif Bros and AptarGroup go up and down completely randomly.
Pair Corralation between Greif Bros and AptarGroup
Considering the 90-day investment horizon Greif Bros is expected to generate 4.27 times less return on investment than AptarGroup. In addition to that, Greif Bros is 1.45 times more volatile than AptarGroup. It trades about 0.02 of its total potential returns per unit of risk. AptarGroup is currently generating about 0.11 per unit of volatility. If you would invest 11,308 in AptarGroup on August 31, 2024 and sell it today you would earn a total of 5,988 from holding AptarGroup or generate 52.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greif Bros vs. AptarGroup
Performance |
| Timeline |
| Greif Bros |
| AptarGroup |
Greif Bros and AptarGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greif Bros and AptarGroup
The main advantage of trading using opposite Greif Bros and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greif Bros position performs unexpectedly, AptarGroup 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 AptarGroup will offset losses from the drop in AptarGroup's long position.The idea behind Greif Bros and AptarGroup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AptarGroup vs. Haemonetics | AptarGroup vs. Merit Medical Systems | AptarGroup vs. AngioDynamics | AptarGroup vs. Envista Holdings Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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