Correlation Between Silgan Holdings and Ball

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

By analyzing existing cross correlation between Silgan Holdings and Ball Corporation, you can compare the effects of market volatilities on Silgan Holdings and Ball 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 Ball. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silgan Holdings and Ball.

Diversification Opportunities for Silgan Holdings and Ball

0.06

Correlation Coefficient

Silgan Holdings  Ball

Significant diversification

The 3 months correlation between Silgan and Ball is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and Ball Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ball 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 Ball. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ball has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and Ball go up and down completely randomly.

Pair Corralation between Silgan Holdings and Ball

Given the investment horizon of 90 days Silgan Holdings is expected to generate 0.87 times more return on investment than Ball. However, Silgan Holdings is 1.15 times less risky than Ball. It trades about -0.01 of its potential returns per unit of risk. Ball Corporation is currently generating about -0.06 per unit of risk. If you would invest  5,234  in Silgan Holdings on December 27, 2024 and sell it today you would lose (85.00) from holding Silgan Holdings or give up 1.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Silgan Holdings  vs.  Ball Corp.

Silgan Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silgan Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Ball

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Silgan Holdings and Ball

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

The idea behind Silgan Holdings and Ball Corporation 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.