Correlation Between Pactiv Evergreen and WestRock

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

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

Diversification Opportunities for Pactiv Evergreen and WestRock

0.14

Correlation Coefficient

Pactiv Evergreen  WestRock

Average diversification

The 3 months correlation between Pactiv and WestRock is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pactiv Evergreen and WestRock Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WestRock and Pactiv Evergreen 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 Pactiv Evergreen are associated (or correlated) with WestRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WestRock has no effect on the direction of Pactiv Evergreen i.e., Pactiv Evergreen and WestRock go up and down completely randomly.

Pair Corralation between Pactiv Evergreen and WestRock

If you would invest  1,133  in Pactiv Evergreen on October 4, 2024 and sell it today you would earn a total of  614.00  from holding Pactiv Evergreen or generate 54.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Pactiv Evergreen  vs.  WestRock Co

Pactiv Evergreen

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pactiv Evergreen are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Pactiv Evergreen exhibited solid returns over the last few months and may actually be approaching a breakup point.

WestRock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WestRock Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, WestRock is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pactiv Evergreen and WestRock

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

The idea behind Pactiv Evergreen and WestRock Co 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.