Correlation Between Myers Industries and Greif

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

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

Diversification Opportunities for Myers Industries and Greif

-0.29

Correlation Coefficient

Myers Industries  Greif

Very good diversification

The 3 months correlation between Myers and Greif is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Myers Industries and Greif Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Inc and Myers Industries 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 Myers Industries are associated (or correlated) with Greif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Inc has no effect on the direction of Myers Industries i.e., Myers Industries and Greif go up and down completely randomly.

Pair Corralation between Myers Industries and Greif

Considering the 90-day investment horizon Myers Industries is expected to generate 2.88 times more return on investment than Greif. However, Myers Industries is 2.88 times more volatile than Greif Inc. It trades about 0.06 of its potential returns per unit of risk. Greif Inc is currently generating about -0.11 per unit of risk. If you would invest  1,096  in Myers Industries on December 27, 2024 and sell it today you would earn a total of  131.00  from holding Myers Industries or generate 11.95% return on investment over 90 days.

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

Myers Industries  vs.  Greif Inc

Myers Industries

Risk-Adjusted Performance

Insignificant

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

Greif Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greif Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Myers Industries and Greif

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

The idea behind Myers Industries and Greif Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.