Correlation Between O I and Greif Bros

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

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

Diversification Opportunities for O I and Greif Bros

-0.29

Correlation Coefficient

O I  Greif Bros

Very good diversification

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

Pair Corralation between O I and Greif Bros

Allowing for the 90-day total investment horizon O I Glass is expected to generate 1.48 times more return on investment than Greif Bros. However, O I is 1.48 times more volatile than Greif Bros. It trades about 0.1 of its potential returns per unit of risk. Greif Bros is currently generating about -0.09 per unit of risk. If you would invest  1,033  in O I Glass on December 26, 2024 and sell it today you would earn a total of  152.00  from holding O I Glass or generate 14.71% return on investment over 90 days.

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

O I Glass  vs.  Greif Bros

O I Glass

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in O I Glass are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile forward indicators, O I demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with O I and Greif Bros

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

The idea behind O I Glass and Greif Bros 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.