Correlation Between Advanced Container and Silgan Holdings

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

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

Diversification Opportunities for Advanced Container and Silgan Holdings

-0.55

Correlation Coefficient

Advanced Container  Silgan Holdings

Excellent diversification

The 3 months correlation between Advanced and Silgan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Container Technologie and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings and Advanced Container 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 Advanced Container Technologies 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 Advanced Container i.e., Advanced Container and Silgan Holdings go up and down completely randomly.

Pair Corralation between Advanced Container and Silgan Holdings

Given the investment horizon of 90 days Advanced Container Technologies is expected to under-perform the Silgan Holdings. In addition to that, Advanced Container is 5.81 times more volatile than Silgan Holdings. It trades about -0.12 of its total potential returns per unit of risk. Silgan Holdings is currently generating about 0.11 per unit of volatility. If you would invest  5,110  in Silgan Holdings on September 15, 2024 and sell it today you would earn a total of  372.00  from holding Silgan Holdings or generate 7.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Advanced Container Technologie  vs.  Silgan Holdings

Advanced Container

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Container Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Silgan Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Silgan Holdings are ranked lower than 8 (%) 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.

Pair Trading with Advanced Container and Silgan Holdings

The main advantage of trading using opposite Advanced Container and Silgan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Container 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 Advanced Container Technologies 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.