Correlation Between O I and Pactiv Evergreen

Can any of the company-specific risk be diversified away by investing in both O I 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 O I and Pactiv Evergreen 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 Pactiv Evergreen, you can compare the effects of market volatilities on O I 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 O I with a short position of Pactiv Evergreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of O I and Pactiv Evergreen.

Diversification Opportunities for O I and Pactiv Evergreen

0.83

Correlation Coefficient

O I  Pactiv Evergreen

Very poor diversification

The 3 months correlation between O I and Pactiv is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding O I Glass and Pactiv Evergreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pactiv Evergreen 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 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 O I i.e., O I and Pactiv Evergreen go up and down completely randomly.

Pair Corralation between O I and Pactiv Evergreen

Allowing for the 90-day total investment horizon O I Glass is expected to generate 11.32 times more return on investment than Pactiv Evergreen. However, O I is 11.32 times more volatile than Pactiv Evergreen. It trades about 0.1 of its potential returns per unit of risk. Pactiv Evergreen is currently generating about 0.2 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 Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

O I Glass  vs.  Pactiv Evergreen

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.

Pactiv Evergreen

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pactiv Evergreen are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Pactiv Evergreen is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with O I and Pactiv Evergreen

The main advantage of trading using opposite O I and Pactiv Evergreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O I 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 O I Glass 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.