Correlation Between Packagingof America and AptarGroup
Can any of the company-specific risk be diversified away by investing in both Packagingof America 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 Packagingof America and AptarGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging of and AptarGroup, you can compare the effects of market volatilities on Packagingof America 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 Packagingof America with a short position of AptarGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packagingof America and AptarGroup.
Diversification Opportunities for Packagingof America and AptarGroup
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Packagingof and AptarGroup is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Packaging of and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Packagingof America 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 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 Packagingof America i.e., Packagingof America and AptarGroup go up and down completely randomly.
Pair Corralation between Packagingof America and AptarGroup
Assuming the 90 days horizon Packaging of is expected to generate 0.98 times more return on investment than AptarGroup. However, Packaging of is 1.02 times less risky than AptarGroup. It trades about 0.37 of its potential returns per unit of risk. AptarGroup is currently generating about 0.13 per unit of risk. If you would invest 20,850 in Packaging of on August 29, 2024 and sell it today you would earn a total of 2,630 from holding Packaging of or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging of vs. AptarGroup
Performance |
| Timeline |
| Packagingof America |
| AptarGroup |
Packagingof America and AptarGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packagingof America and AptarGroup
The main advantage of trading using opposite Packagingof America and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packagingof America 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.| Packagingof America vs. AptarGroup | Packagingof America vs. Superior Plus Corp | Packagingof America vs. NMI Holdings | Packagingof America vs. Origin Agritech |
| AptarGroup vs. Superior Plus Corp | AptarGroup vs. NMI Holdings | AptarGroup vs. Origin Agritech | AptarGroup vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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