Correlation Between WestRock and Silgan Holdings

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

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

Diversification Opportunities for WestRock and Silgan Holdings

0.0

Correlation Coefficient

WestRock  Silgan Holdings

Pay attention - limited upside

The 3 months correlation between WestRock and Silgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WestRock Co and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings and WestRock 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 WestRock Co are associated (or correlated) with Silgan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgan Holdings has no effect on the direction of WestRock i.e., WestRock and Silgan Holdings go up and down completely randomly.

Pair Corralation between WestRock and Silgan Holdings

If you would invest  5,152  in Silgan Holdings on December 29, 2024 and sell it today you would lose (3.00) from holding Silgan Holdings or give up 0.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

WestRock Co  vs.  Silgan Holdings

WestRock

Risk-Adjusted Performance

Very Weak

Over the last 90 days WestRock Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, WestRock is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with WestRock and Silgan Holdings

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

The idea behind WestRock Co and Silgan Holdings 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.