Correlation Between Millennium Group and Pactiv Evergreen

Can any of the company-specific risk be diversified away by investing in both Millennium Group and Pactiv Evergreen 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 Millennium Group and Pactiv Evergreen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Millennium Group International and Pactiv Evergreen, you can compare the effects of market volatilities on Millennium Group and Pactiv Evergreen 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 Millennium Group with a short position of Pactiv Evergreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Millennium Group and Pactiv Evergreen.

Diversification Opportunities for Millennium Group and Pactiv Evergreen

-0.64

Correlation Coefficient

Millennium Group  Pactiv Evergreen

Excellent diversification

The 3 months correlation between Millennium and Pactiv is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Millennium Group International and Pactiv Evergreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pactiv Evergreen and Millennium Group 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 Millennium Group International are associated (or correlated) with Pactiv Evergreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pactiv Evergreen has no effect on the direction of Millennium Group i.e., Millennium Group and Pactiv Evergreen go up and down completely randomly.

Pair Corralation between Millennium Group and Pactiv Evergreen

Given the investment horizon of 90 days Millennium Group International is expected to under-perform the Pactiv Evergreen. In addition to that, Millennium Group is 1.03 times more volatile than Pactiv Evergreen. It trades about -0.06 of its total potential returns per unit of risk. Pactiv Evergreen is currently generating about 0.21 per unit of volatility. If you would invest  1,181  in Pactiv Evergreen on September 25, 2024 and sell it today you would earn a total of  550.00  from holding Pactiv Evergreen or generate 46.57% return on investment over 90 days.

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

Millennium Group International  vs.  Pactiv Evergreen

Millennium Group Int

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Millennium Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pactiv Evergreen

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pactiv Evergreen are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Pactiv Evergreen exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Millennium Group and Pactiv Evergreen

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

The idea behind Millennium Group International and Pactiv Evergreen 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..