Correlation Between Silgan Holdings and Myers Industries

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

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

Diversification Opportunities for Silgan Holdings and Myers Industries

-0.11

Correlation Coefficient

Silgan Holdings  Myers Industries

Good diversification

The 3 months correlation between Silgan and Myers is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries 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 Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and Myers Industries go up and down completely randomly.

Pair Corralation between Silgan Holdings and Myers Industries

Given the investment horizon of 90 days Silgan Holdings is expected to generate 27.16 times less return on investment than Myers Industries. But when comparing it to its historical volatility, Silgan Holdings is 3.06 times less risky than Myers Industries. It trades about 0.01 of its potential returns per unit of risk. Myers Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,081  in Myers Industries on December 28, 2024 and sell it today you would earn a total of  114.00  from holding Myers Industries or generate 10.55% 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.  Myers Industries

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.

Myers Industries

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Silgan Holdings and Myers Industries

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

The idea behind Silgan Holdings and Myers Industries 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.