Correlation Between Myers Industries and Packaging Corp

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

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

Diversification Opportunities for Myers Industries and Packaging Corp

-0.38

Correlation Coefficient

Myers Industries  Packaging Corp

Very good diversification

The 3 months correlation between Myers and Packaging is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Myers Industries and Packaging Corp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging Corp 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 Packaging Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging Corp has no effect on the direction of Myers Industries i.e., Myers Industries and Packaging Corp go up and down completely randomly.

Pair Corralation between Myers Industries and Packaging Corp

Considering the 90-day investment horizon Myers Industries is expected to generate 2.42 times more return on investment than Packaging Corp. However, Myers Industries is 2.42 times more volatile than Packaging Corp of. It trades about 0.06 of its potential returns per unit of risk. Packaging Corp of is currently generating about -0.11 per unit of risk. If you would invest  1,081  in Myers Industries on December 28, 2024 and sell it today you would earn a total of  109.00  from holding Myers Industries or generate 10.08% 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.  Packaging Corp of

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.

Packaging Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Packaging Corp of 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-looking signals remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Myers Industries and Packaging Corp

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

The idea behind Myers Industries and Packaging Corp of 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.