Correlation Between MARKET VECTR and Graphic Packaging
Can any of the company-specific risk be diversified away by investing in both MARKET VECTR and Graphic Packaging 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 MARKET VECTR and Graphic Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MARKET VECTR RETAIL and Graphic Packaging Holding, you can compare the effects of market volatilities on MARKET VECTR and Graphic Packaging 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 MARKET VECTR with a short position of Graphic Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and Graphic Packaging.
Diversification Opportunities for MARKET VECTR and Graphic Packaging
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MARKET and Graphic is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding and MARKET VECTR 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 MARKET VECTR RETAIL are associated (or correlated) with Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of MARKET VECTR i.e., MARKET VECTR and Graphic Packaging go up and down completely randomly.
Pair Corralation between MARKET VECTR and Graphic Packaging
Assuming the 90 days trading horizon MARKET VECTR is expected to generate 1.04 times less return on investment than Graphic Packaging. But when comparing it to its historical volatility, MARKET VECTR RETAIL is 1.24 times less risky than Graphic Packaging. It trades about 0.23 of its potential returns per unit of risk. Graphic Packaging Holding is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,672 in Graphic Packaging Holding on September 15, 2024 and sell it today you would earn a total of 122.00 from holding Graphic Packaging Holding or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MARKET VECTR RETAIL vs. Graphic Packaging Holding
Performance |
| Timeline |
| MARKET VECTR RETAIL |
| Graphic Packaging Holding |
MARKET VECTR and Graphic Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MARKET VECTR and Graphic Packaging
The main advantage of trading using opposite MARKET VECTR and Graphic Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARKET VECTR position performs unexpectedly, Graphic Packaging 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 Graphic Packaging will offset losses from the drop in Graphic Packaging's long position.| MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Apple Inc | MARKET VECTR vs. Apple Inc |
| Graphic Packaging vs. MARKET VECTR RETAIL | Graphic Packaging vs. COSTCO WHOLESALE CDR | Graphic Packaging vs. FORMPIPE SOFTWARE AB | Graphic Packaging vs. BJs Wholesale Club |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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