Correlation Between Packaging Corp and Silgan Holdings
Can any of the company-specific risk be diversified away by investing in both Packaging Corp and Silgan Holdings 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 Silgan Holdings 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 Silgan Holdings, you can compare the effects of market volatilities on Packaging Corp and Silgan Holdings 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 Silgan Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging Corp and Silgan Holdings.
Diversification Opportunities for Packaging Corp and Silgan Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Packaging and Silgan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Packaging Corp of and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings 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 Silgan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgan Holdings has no effect on the direction of Packaging Corp i.e., Packaging Corp and Silgan Holdings go up and down completely randomly.
Pair Corralation between Packaging Corp and Silgan Holdings
Considering the 90-day investment horizon Packaging Corp is expected to generate 1.24 times less return on investment than Silgan Holdings. But when comparing it to its historical volatility, Packaging Corp of is 1.02 times less risky than Silgan Holdings. It trades about 0.28 of its potential returns per unit of risk. Silgan Holdings is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 5,095 in Silgan Holdings on August 24, 2024 and sell it today you would earn a total of 465.00 from holding Silgan Holdings or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging Corp of vs. Silgan Holdings
Performance |
| Timeline |
| Packaging Corp |
| Silgan Holdings |
Packaging Corp and Silgan Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packaging Corp and Silgan Holdings
The main advantage of trading using opposite Packaging Corp and Silgan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packaging Corp position performs unexpectedly, Silgan Holdings 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 Silgan Holdings will offset losses from the drop in Silgan Holdings' long position.| Packaging Corp vs. Avery Dennison Corp | Packaging Corp vs. O I Glass | Packaging Corp vs. Silgan Holdings | Packaging Corp vs. Sealed Air |
| Silgan Holdings vs. Pactiv Evergreen | Silgan Holdings vs. Myers Industries | Silgan Holdings vs. Sonoco Products | Silgan Holdings vs. Avery Dennison 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |