Correlation Between TriMas and Packaging Corp
Can any of the company-specific risk be diversified away by investing in both TriMas and Packaging Corp 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 TriMas and Packaging Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TriMas and Packaging Corp of, you can compare the effects of market volatilities on TriMas and Packaging Corp 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 TriMas with a short position of Packaging Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TriMas and Packaging Corp.
Diversification Opportunities for TriMas and Packaging Corp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TriMas and Packaging is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding TriMas and Packaging Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging Corp and TriMas 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 TriMas are associated (or correlated) with Packaging Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging Corp has no effect on the direction of TriMas i.e., TriMas and Packaging Corp go up and down completely randomly.
Pair Corralation between TriMas and Packaging Corp
Considering the 90-day investment horizon TriMas is expected to under-perform the Packaging Corp. In addition to that, TriMas is 2.45 times more volatile than Packaging Corp of. It trades about -0.01 of its total potential returns per unit of risk. Packaging Corp of is currently generating about 0.35 per unit of volatility. If you would invest 22,745 in Packaging Corp of on August 28, 2024 and sell it today you would earn a total of 1,983 from holding Packaging Corp of or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TriMas vs. Packaging Corp of
Performance |
| Timeline |
| TriMas |
| Packaging Corp |
TriMas and Packaging Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TriMas and Packaging Corp
The main advantage of trading using opposite TriMas and Packaging Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TriMas position performs unexpectedly, Packaging Corp 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 Packaging Corp will offset losses from the drop in Packaging Corp's long position.| TriMas vs. Greif Bros | TriMas vs. Karat Packaging | TriMas vs. Reynolds Consumer Products | TriMas vs. Silgan Holdings |
| Packaging Corp vs. Avery Dennison Corp | Packaging Corp vs. O I Glass | Packaging Corp vs. Silgan Holdings | Packaging Corp vs. Sealed Air |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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