Correlation Between Reynolds Consumer and Greif Bros
Can any of the company-specific risk be diversified away by investing in both Reynolds Consumer and Greif Bros 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 Reynolds Consumer and Greif Bros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reynolds Consumer Products and Greif Bros, you can compare the effects of market volatilities on Reynolds Consumer and Greif Bros 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 Reynolds Consumer with a short position of Greif Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reynolds Consumer and Greif Bros.
Diversification Opportunities for Reynolds Consumer and Greif Bros
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Reynolds and Greif is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Reynolds Consumer Products and Greif Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Bros and Reynolds Consumer 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 Reynolds Consumer Products are associated (or correlated) with Greif Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Bros has no effect on the direction of Reynolds Consumer i.e., Reynolds Consumer and Greif Bros go up and down completely randomly.
Pair Corralation between Reynolds Consumer and Greif Bros
Given the investment horizon of 90 days Reynolds Consumer Products is expected to generate 0.83 times more return on investment than Greif Bros. However, Reynolds Consumer Products is 1.2 times less risky than Greif Bros. It trades about -0.08 of its potential returns per unit of risk. Greif Bros is currently generating about -0.1 per unit of risk. If you would invest 2,659 in Reynolds Consumer Products on January 16, 2025 and sell it today you would lose (262.00) from holding Reynolds Consumer Products or give up 9.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reynolds Consumer Products vs. Greif Bros
Performance |
| Timeline |
| Reynolds Consumer |
| Greif Bros |
Reynolds Consumer and Greif Bros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reynolds Consumer and Greif Bros
The main advantage of trading using opposite Reynolds Consumer and Greif Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reynolds Consumer position performs unexpectedly, Greif Bros 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 Greif Bros will offset losses from the drop in Greif Bros' long position.| Reynolds Consumer vs. Greif Bros | Reynolds Consumer vs. Karat Packaging | Reynolds Consumer vs. Silgan Holdings | Reynolds Consumer vs. O I Glass |
| Greif Bros vs. Silgan Holdings | Greif Bros vs. AptarGroup | Greif Bros vs. Sonoco Products | Greif Bros vs. Graphic Packaging Holding |
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 Stocks Directory module to find actively traded stocks across global markets.
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