Correlation Between Silgan Holdings and Crown Holdings

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

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

Diversification Opportunities for Silgan Holdings and Crown Holdings

-0.32

Correlation Coefficient

Silgan Holdings  Crown Holdings

Very good diversification

The 3 months correlation between Silgan and Crown is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and Crown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Holdings 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 Crown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Holdings has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and Crown Holdings go up and down completely randomly.

Pair Corralation between Silgan Holdings and Crown Holdings

Given the investment horizon of 90 days Silgan Holdings is expected to generate 0.94 times more return on investment than Crown Holdings. However, Silgan Holdings is 1.07 times less risky than Crown Holdings. It trades about 0.15 of its potential returns per unit of risk. Crown Holdings is currently generating about -0.03 per unit of risk. If you would invest  4,983  in Silgan Holdings on September 12, 2024 and sell it today you would earn a total of  531.00  from holding Silgan Holdings or generate 10.66% return on investment over 90 days.

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

Silgan Holdings  vs.  Crown Holdings

Silgan Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Silgan Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Silgan Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Crown Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Crown Holdings 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 Crown Holdings

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

The idea behind Silgan Holdings and Crown Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.