Correlation Between Packaging and Graphic Packaging
Can any of the company-specific risk be diversified away by investing in both Packaging and Graphic Packaging 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 Packaging and Graphic Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging of and Graphic Packaging Holding, you can compare the effects of market volatilities on Packaging and Graphic Packaging 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 Packaging with a short position of Graphic Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging and Graphic Packaging.
Diversification Opportunities for Packaging and Graphic Packaging
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Packaging and Graphic is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Packaging of and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding and Packaging 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 Packaging of are associated (or correlated) with Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of Packaging i.e., Packaging and Graphic Packaging go up and down completely randomly.
Pair Corralation between Packaging and Graphic Packaging
Assuming the 90 days horizon Packaging is expected to generate 4.33 times less return on investment than Graphic Packaging. But when comparing it to its historical volatility, Packaging of is 1.26 times less risky than Graphic Packaging. It trades about 0.03 of its potential returns per unit of risk. Graphic Packaging Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,726 in Graphic Packaging Holding on September 13, 2024 and sell it today you would earn a total of 64.00 from holding Graphic Packaging Holding or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging of vs. Graphic Packaging Holding
Performance |
| Timeline |
| Packaging |
| Graphic Packaging Holding |
Packaging and Graphic Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packaging and Graphic Packaging
The main advantage of trading using opposite Packaging and Graphic Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packaging position performs unexpectedly, Graphic Packaging 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 Graphic Packaging will offset losses from the drop in Graphic Packaging's long position.| Packaging vs. Graphic Packaging Holding | Packaging vs. Superior Plus Corp | Packaging vs. SIVERS SEMICONDUCTORS AB | Packaging vs. Norsk Hydro ASA |
| Graphic Packaging vs. Packaging of | Graphic Packaging vs. Superior Plus Corp | Graphic Packaging vs. SIVERS SEMICONDUCTORS AB | Graphic Packaging vs. Norsk Hydro ASA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |