Correlation Between Silgan Holdings and Greif

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

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

Diversification Opportunities for Silgan Holdings and Greif

0.37

Correlation Coefficient

Silgan Holdings  Greif

Weak diversification

The 3 months correlation between Silgan and Greif is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and Greif Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Inc 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 Greif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Inc has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and Greif go up and down completely randomly.

Pair Corralation between Silgan Holdings and Greif

Given the investment horizon of 90 days Silgan Holdings is expected to generate 0.95 times more return on investment than Greif. However, Silgan Holdings is 1.06 times less risky than Greif. It trades about -0.01 of its potential returns per unit of risk. Greif Inc is currently generating about -0.09 per unit of risk. If you would invest  5,152  in Silgan Holdings on December 28, 2024 and sell it today you would lose (82.00) from holding Silgan Holdings or give up 1.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Silgan Holdings  vs.  Greif Inc

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.

Greif Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greif Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Silgan Holdings and Greif

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

The idea behind Silgan Holdings and Greif Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.