Correlation Between Silgan Holdings and Ranpak Holdings

Can any of the company-specific risk be diversified away by investing in both Silgan Holdings and Ranpak 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 Ranpak 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 Ranpak Holdings Corp, you can compare the effects of market volatilities on Silgan Holdings and Ranpak 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 Ranpak Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silgan Holdings and Ranpak Holdings.

Diversification Opportunities for Silgan Holdings and Ranpak Holdings

0.86

Correlation Coefficient

Silgan Holdings  Ranpak Holdings

Very poor diversification

The 3 months correlation between Silgan and Ranpak is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and Ranpak Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ranpak Holdings Corp 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 Ranpak Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ranpak Holdings Corp has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and Ranpak Holdings go up and down completely randomly.

Pair Corralation between Silgan Holdings and Ranpak Holdings

Given the investment horizon of 90 days Silgan Holdings is expected to generate 1.48 times less return on investment than Ranpak Holdings. But when comparing it to its historical volatility, Silgan Holdings is 2.05 times less risky than Ranpak Holdings. It trades about 0.18 of its potential returns per unit of risk. Ranpak Holdings Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  666.00  in Ranpak Holdings Corp on September 4, 2024 and sell it today you would earn a total of  122.00  from holding Ranpak Holdings Corp or generate 18.32% return on investment over 90 days.

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

Silgan Holdings  vs.  Ranpak Holdings Corp

Silgan Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Silgan Holdings are ranked lower than 14 (%) 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.

Ranpak Holdings Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ranpak Holdings Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile fundamental indicators, Ranpak Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silgan Holdings and Ranpak Holdings

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

The idea behind Silgan Holdings and Ranpak Holdings Corp 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 Anywhere module to track or share privately all of your investments from the convenience of any device.