Correlation Between Sonoco Products and Crown Holdings
Can any of the company-specific risk be diversified away by investing in both Sonoco Products and Crown 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 Sonoco Products and Crown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonoco Products and Crown Holdings, you can compare the effects of market volatilities on Sonoco Products and Crown 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 Sonoco Products with a short position of Crown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonoco Products and Crown Holdings.
Diversification Opportunities for Sonoco Products and Crown Holdings
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonoco and Crown is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sonoco Products and Crown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Holdings and Sonoco Products 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 Sonoco Products are associated (or correlated) with Crown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Holdings has no effect on the direction of Sonoco Products i.e., Sonoco Products and Crown Holdings go up and down completely randomly.
Pair Corralation between Sonoco Products and Crown Holdings
Considering the 90-day investment horizon Sonoco Products is expected to under-perform the Crown Holdings. In addition to that, Sonoco Products is 1.03 times more volatile than Crown Holdings. It trades about -0.15 of its total potential returns per unit of risk. Crown Holdings is currently generating about -0.09 per unit of volatility. If you would invest 9,482 in Crown Holdings on August 27, 2024 and sell it today you would lose (200.00) from holding Crown Holdings or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonoco Products vs. Crown Holdings
Performance |
| Timeline |
| Sonoco Products |
| Crown Holdings |
Sonoco Products and Crown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonoco Products and Crown Holdings
The main advantage of trading using opposite Sonoco Products and Crown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonoco Products position performs unexpectedly, Crown 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 Crown Holdings will offset losses from the drop in Crown Holdings' long position.| Sonoco Products vs. AptarGroup | Sonoco Products vs. Silgan Holdings | Sonoco Products vs. RPM International | Sonoco Products vs. Packaging Corp of |
| Crown Holdings vs. AptarGroup | Crown Holdings vs. Sonoco Products | Crown Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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