Correlation Between Silgan Holdings and Pactiv Evergreen

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

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

Diversification Opportunities for Silgan Holdings and Pactiv Evergreen

-0.05

Correlation Coefficient

Silgan Holdings  Pactiv Evergreen

Good diversification

The 3 months correlation between Silgan and Pactiv is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and Pactiv Evergreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pactiv Evergreen 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 Pactiv Evergreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pactiv Evergreen has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and Pactiv Evergreen go up and down completely randomly.

Pair Corralation between Silgan Holdings and Pactiv Evergreen

Given the investment horizon of 90 days Silgan Holdings is expected to generate 4.81 times less return on investment than Pactiv Evergreen. In addition to that, Silgan Holdings is 6.28 times more volatile than Pactiv Evergreen. It trades about 0.01 of its total potential returns per unit of risk. Pactiv Evergreen is currently generating about 0.19 per unit of volatility. If you would invest  1,748  in Pactiv Evergreen on December 29, 2024 and sell it today you would earn a total of  48.00  from holding Pactiv Evergreen or generate 2.75% 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.  Pactiv Evergreen

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.

Pactiv Evergreen

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pactiv Evergreen are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Pactiv Evergreen is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Silgan Holdings and Pactiv Evergreen

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

The idea behind Silgan Holdings and Pactiv Evergreen 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.