Correlation Between Silgan Holdings and CCL Industries

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Can any of the company-specific risk be diversified away by investing in both Silgan Holdings and CCL Industries 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 Silgan Holdings and CCL Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silgan Holdings and CCL Industries, you can compare the effects of market volatilities on Silgan Holdings and CCL Industries 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 Silgan Holdings with a short position of CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silgan Holdings and CCL Industries.

Diversification Opportunities for Silgan Holdings and CCL Industries

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Silgan and CCL is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries and Silgan Holdings 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 Silgan Holdings are associated (or correlated) with CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and CCL Industries go up and down completely randomly.

Pair Corralation between Silgan Holdings and CCL Industries

Given the investment horizon of 90 days Silgan Holdings is expected to generate 0.86 times more return on investment than CCL Industries. However, Silgan Holdings is 1.17 times less risky than CCL Industries. It trades about 0.41 of its potential returns per unit of risk. CCL Industries is currently generating about -0.22 per unit of risk. If you would invest  5,090  in Silgan Holdings on August 26, 2024 and sell it today you would earn a total of  563.00  from holding Silgan Holdings or generate 11.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Silgan Holdings  vs.  CCL Industries

 Performance 
       Timeline  
Silgan Holdings 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Silgan Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Silgan Holdings may actually be approaching a critical reversion point that can send shares even higher in December 2024.
CCL Industries 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CCL Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, CCL Industries is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Silgan Holdings and CCL Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Silgan Holdings and CCL Industries

The main advantage of trading using opposite Silgan Holdings and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silgan Holdings position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.
The idea behind Silgan Holdings and CCL Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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