Correlation Between Greif Bros and Ranpak Holdings

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

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

Diversification Opportunities for Greif Bros and Ranpak Holdings

0.63

Correlation Coefficient

Greif Bros  Ranpak Holdings

Poor diversification

The 3 months correlation between Greif and Ranpak is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Greif Bros and Ranpak Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ranpak Holdings Corp and Greif Bros 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 Greif Bros are associated (or correlated) with Ranpak Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ranpak Holdings Corp has no effect on the direction of Greif Bros i.e., Greif Bros and Ranpak Holdings go up and down completely randomly.

Pair Corralation between Greif Bros and Ranpak Holdings

Considering the 90-day investment horizon Greif Bros is expected to generate 0.27 times more return on investment than Ranpak Holdings. However, Greif Bros is 3.72 times less risky than Ranpak Holdings. It trades about -0.06 of its potential returns per unit of risk. Ranpak Holdings Corp is currently generating about -0.03 per unit of risk. If you would invest  6,067  in Greif Bros on December 27, 2024 and sell it today you would lose (468.00) from holding Greif Bros or give up 7.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Greif Bros  vs.  Ranpak Holdings Corp

Greif Bros

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greif Bros has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Ranpak Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ranpak Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Greif Bros and Ranpak Holdings

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

The idea behind Greif Bros and Ranpak Holdings Corp 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.