Correlation Between Glatfelter and Graphic Packaging

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

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

Diversification Opportunities for Glatfelter and Graphic Packaging

-0.13

Correlation Coefficient

Glatfelter  Graphic Packaging

Good diversification

The 3 months correlation between Glatfelter and Graphic is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Glatfelter and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding and Glatfelter 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 Glatfelter are associated (or correlated) with Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of Glatfelter i.e., Glatfelter and Graphic Packaging go up and down completely randomly.

Pair Corralation between Glatfelter and Graphic Packaging

Considering the 90-day investment horizon Glatfelter is expected to under-perform the Graphic Packaging. In addition to that, Glatfelter is 2.23 times more volatile than Graphic Packaging Holding. It trades about -0.11 of its total potential returns per unit of risk. Graphic Packaging Holding is currently generating about -0.07 per unit of volatility. If you would invest  2,949  in Graphic Packaging Holding on September 29, 2024 and sell it today you would lose (204.00) from holding Graphic Packaging Holding or give up 6.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	42.86%
Values	Daily Returns

Glatfelter  vs.  Graphic Packaging Holding

Glatfelter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glatfelter 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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Graphic Packaging Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Graphic Packaging Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Glatfelter and Graphic Packaging

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

The idea behind Glatfelter and Graphic Packaging Holding 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.