Correlation Between Packaging Corp and O I
Can any of the company-specific risk be diversified away by investing in both Packaging Corp and O I 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 Corp and O I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging Corp of and O I Glass, you can compare the effects of market volatilities on Packaging Corp and O I 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 Corp with a short position of O I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging Corp and O I.
Diversification Opportunities for Packaging Corp and O I
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Packaging and O I is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Packaging Corp of and O I Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O I Glass and Packaging Corp 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 Corp of are associated (or correlated) with O I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O I Glass has no effect on the direction of Packaging Corp i.e., Packaging Corp and O I go up and down completely randomly.
Pair Corralation between Packaging Corp and O I
Considering the 90-day investment horizon Packaging Corp of is expected to generate 0.32 times more return on investment than O I. However, Packaging Corp of is 3.08 times less risky than O I. It trades about 0.36 of its potential returns per unit of risk. O I Glass is currently generating about 0.04 per unit of risk. If you would invest 22,745 in Packaging Corp of on August 27, 2024 and sell it today you would earn a total of 1,983 from holding Packaging Corp of or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging Corp of vs. O I Glass
Performance |
| Timeline |
| Packaging Corp |
| O I Glass |
Packaging Corp and O I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packaging Corp and O I
The main advantage of trading using opposite Packaging Corp and O I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packaging Corp position performs unexpectedly, O I 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 O I will offset losses from the drop in O I's long position.| Packaging Corp vs. Avery Dennison Corp | Packaging Corp vs. O I Glass | Packaging Corp vs. Silgan Holdings | Packaging Corp vs. Sealed Air |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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