Correlation Between Packaging Corp and Nuvve Holding

Can any of the company-specific risk be diversified away by investing in both Packaging Corp and Nuvve Holding 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 Nuvve Holding 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 Nuvve Holding Corp, you can compare the effects of market volatilities on Packaging Corp and Nuvve Holding 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 Nuvve Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging Corp and Nuvve Holding.

Diversification Opportunities for Packaging Corp and Nuvve Holding

-0.49

Correlation Coefficient

Packaging Corp  Nuvve Holding

Very good diversification

The 3 months correlation between Packaging and Nuvve is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Packaging Corp of and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp 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 Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of Packaging Corp i.e., Packaging Corp and Nuvve Holding go up and down completely randomly.

Pair Corralation between Packaging Corp and Nuvve Holding

Considering the 90-day investment horizon Packaging Corp of is expected to generate 0.11 times more return on investment than Nuvve Holding. However, Packaging Corp of is 8.85 times less risky than Nuvve Holding. It trades about -0.23 of its potential returns per unit of risk. Nuvve Holding Corp is currently generating about -0.04 per unit of risk. If you would invest  23,579  in Packaging Corp of on October 15, 2024 and sell it today you would lose (774.00) from holding Packaging Corp of or give up 3.28% of portfolio value over 90 days.

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

Packaging Corp of  vs.  Nuvve Holding Corp

Packaging Corp

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Packaging Corp of are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, Packaging Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Packaging Corp and Nuvve Holding

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

The idea behind Packaging Corp of and Nuvve Holding Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.