Correlation Between Sylvamo Corp and GLT Old

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

By analyzing existing cross correlation between Sylvamo Corp and GLT Old, you can compare the effects of market volatilities on Sylvamo Corp and GLT Old 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 Sylvamo Corp with a short position of GLT Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sylvamo Corp and GLT Old.

Diversification Opportunities for Sylvamo Corp and GLT Old

-0.03

Correlation Coefficient

Sylvamo Corp  GLT Old

Good diversification

The 3 months correlation between Sylvamo and GLT is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sylvamo Corp and GLT Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLT Old and Sylvamo Corp 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 Sylvamo Corp are associated (or correlated) with GLT Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLT Old has no effect on the direction of Sylvamo Corp i.e., Sylvamo Corp and GLT Old go up and down completely randomly.

Pair Corralation between Sylvamo Corp and GLT Old

Given the investment horizon of 90 days Sylvamo Corp is expected to generate 0.37 times more return on investment than GLT Old. However, Sylvamo Corp is 2.72 times less risky than GLT Old. It trades about 0.06 of its potential returns per unit of risk. GLT Old is currently generating about 0.0 per unit of risk. If you would invest  4,361  in Sylvamo Corp on October 11, 2024 and sell it today you would earn a total of  3,365  from holding Sylvamo Corp or generate 77.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.31%
Values	Daily Returns

Sylvamo Corp  vs.  GLT Old

Sylvamo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sylvamo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sylvamo Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

GLT Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GLT Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sylvamo Corp and GLT Old

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

The idea behind Sylvamo Corp and GLT Old 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.