Correlation Between Silgan Holdings and Advanced Container

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

By analyzing existing cross correlation between Silgan Holdings and Advanced Container Technologies, you can compare the effects of market volatilities on Silgan Holdings and Advanced Container 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 Silgan Holdings with a short position of Advanced Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silgan Holdings and Advanced Container.

Diversification Opportunities for Silgan Holdings and Advanced Container

-0.35

Correlation Coefficient

Silgan Holdings  Advanced Container

Very good diversification

The 3 months correlation between Silgan and Advanced is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and Advanced Container Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Container and Silgan Holdings 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 Silgan Holdings are associated (or correlated) with Advanced Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Container has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and Advanced Container go up and down completely randomly.

Pair Corralation between Silgan Holdings and Advanced Container

Given the investment horizon of 90 days Silgan Holdings is expected to generate 46.61 times less return on investment than Advanced Container. But when comparing it to its historical volatility, Silgan Holdings is 15.02 times less risky than Advanced Container. It trades about 0.05 of its potential returns per unit of risk. Advanced Container Technologies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Advanced Container Technologies on October 1, 2024 and sell it today you would earn a total of  0.01  from holding Advanced Container Technologies or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Silgan Holdings  vs.  Advanced Container Technologie

Silgan Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silgan Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Silgan Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Advanced Container

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Container Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Advanced Container showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silgan Holdings and Advanced Container

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

The idea behind Silgan Holdings and Advanced Container Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.