Correlation Between Pactiv Evergreen and Cascades
Can any of the company-specific risk be diversified away by investing in both Pactiv Evergreen and Cascades 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 Pactiv Evergreen and Cascades into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pactiv Evergreen and Cascades, you can compare the effects of market volatilities on Pactiv Evergreen and Cascades 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 Pactiv Evergreen with a short position of Cascades. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pactiv Evergreen and Cascades.
Diversification Opportunities for Pactiv Evergreen and Cascades
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pactiv and Cascades is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pactiv Evergreen and Cascades in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascades and Pactiv Evergreen 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 Pactiv Evergreen are associated (or correlated) with Cascades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascades has no effect on the direction of Pactiv Evergreen i.e., Pactiv Evergreen and Cascades go up and down completely randomly.
Pair Corralation between Pactiv Evergreen and Cascades
Given the investment horizon of 90 days Pactiv Evergreen is expected to generate 1.0 times more return on investment than Cascades. However, Pactiv Evergreen is 1.0 times more volatile than Cascades. It trades about 0.04 of its potential returns per unit of risk. Cascades is currently generating about 0.01 per unit of risk. If you would invest 1,201 in Pactiv Evergreen on September 4, 2024 and sell it today you would earn a total of 245.00 from holding Pactiv Evergreen or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.54% |
| Values | Daily Returns |
Pactiv Evergreen vs. Cascades
Performance |
| Timeline |
| Pactiv Evergreen |
| Cascades |
Pactiv Evergreen and Cascades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pactiv Evergreen and Cascades
The main advantage of trading using opposite Pactiv Evergreen and Cascades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pactiv Evergreen position performs unexpectedly, Cascades 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 Cascades will offset losses from the drop in Cascades' long position.| Pactiv Evergreen vs. Stepstone Group | Pactiv Evergreen vs. Reynolds Consumer Products | Pactiv Evergreen vs. Broadstone Net Lease | Pactiv Evergreen vs. Pmv Pharmaceuticals |
| Cascades vs. Advantage Solutions | Cascades vs. Atlas Corp | Cascades vs. PureCycle Technologies | Cascades vs. WM Technology |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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