Correlation Between Advanced Container and Silgan Holdings

Can any of the company-specific risk be diversified away by investing in both Advanced Container and Silgan 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 Advanced Container and Silgan Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Advanced Container Technologies and Silgan Holdings, you can compare the effects of market volatilities on Advanced Container and Silgan 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 Advanced Container with a short position of Silgan Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Container and Silgan Holdings.

Diversification Opportunities for Advanced Container and Silgan Holdings

-0.35

Correlation Coefficient

Advanced Container  Silgan Holdings

Very good diversification

The 3 months correlation between Advanced and Silgan is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Container Technologie and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings and Advanced Container 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 Advanced Container Technologies are associated (or correlated) with Silgan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgan Holdings has no effect on the direction of Advanced Container i.e., Advanced Container and Silgan Holdings go up and down completely randomly.

Pair Corralation between Advanced Container and Silgan Holdings

Given the investment horizon of 90 days Advanced Container Technologies is expected to generate 15.02 times more return on investment than Silgan Holdings. However, Advanced Container is 15.02 times more volatile than Silgan Holdings. It trades about 0.15 of its potential returns per unit of risk. Silgan Holdings is currently generating about 0.05 per unit of risk. If you would invest  0.01  in Advanced Container Technologies on October 1, 2024 and sell it today you would earn a total of  0.01  from holding Advanced Container Technologies or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Advanced Container Technologie  vs.  Silgan Holdings

Advanced Container

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Container Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Advanced Container showed solid returns over the last few months and may actually be approaching a breakup point.

Silgan Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silgan Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Silgan Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Advanced Container and Silgan Holdings

The main advantage of trading using opposite Advanced Container and Silgan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Container position performs unexpectedly, Silgan 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 Silgan Holdings will offset losses from the drop in Silgan Holdings' long position.

The idea behind Advanced Container Technologies and Silgan Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.