Correlation Between Packaging Corp and Myers Industries

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

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

Diversification Opportunities for Packaging Corp and Myers Industries

-0.38

Correlation Coefficient

Packaging Corp  Myers Industries

Very good diversification

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

Pair Corralation between Packaging Corp and Myers Industries

Considering the 90-day investment horizon Packaging Corp of is expected to under-perform the Myers Industries. But the stock apears to be less risky and, when comparing its historical volatility, Packaging Corp of is 2.42 times less risky than Myers Industries. The stock trades about -0.11 of its potential returns per unit of risk. The Myers Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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

Packaging Corp of  vs.  Myers Industries

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.

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.

Pair Trading with Packaging Corp and Myers Industries

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

The idea behind Packaging Corp of and Myers Industries 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.