Correlation Between Greif Bros and Sonoco Products
Can any of the company-specific risk be diversified away by investing in both Greif Bros 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 Greif Bros and Sonoco Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greif Bros and Sonoco Products, you can compare the effects of market volatilities on Greif Bros 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 Greif Bros with a short position of Sonoco Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greif Bros and Sonoco Products.
Diversification Opportunities for Greif Bros and Sonoco Products
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Greif and Sonoco is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Greif Bros and Sonoco Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoco Products 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 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 Greif Bros i.e., Greif Bros and Sonoco Products go up and down completely randomly.
Pair Corralation between Greif Bros and Sonoco Products
Considering the 90-day investment horizon Greif Bros is expected to generate 1.23 times more return on investment than Sonoco Products. However, Greif Bros is 1.23 times more volatile than Sonoco Products. It trades about 0.02 of its potential returns per unit of risk. Sonoco Products is currently generating about -0.01 per unit of risk. If you would invest 6,520 in Greif Bros on August 24, 2024 and sell it today you would earn a total of 424.00 from holding Greif Bros or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Greif Bros vs. Sonoco Products
Performance |
| Timeline |
| Greif Bros |
| Sonoco Products |
Greif Bros and Sonoco Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greif Bros and Sonoco Products
The main advantage of trading using opposite Greif Bros and Sonoco Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greif Bros 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.| Greif Bros vs. Silgan Holdings | Greif Bros vs. AptarGroup | Greif Bros vs. Sonoco Products | Greif Bros vs. Graphic Packaging Holding |
| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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