Correlation Between Glatfelter and Silgan Holdings

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

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

Diversification Opportunities for Glatfelter and Silgan Holdings

0.27

Correlation Coefficient

Glatfelter  Silgan Holdings

Modest diversification

The 3 months correlation between Glatfelter and Silgan is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Glatfelter and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings 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 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 Glatfelter i.e., Glatfelter and Silgan Holdings go up and down completely randomly.

Pair Corralation between Glatfelter and Silgan Holdings

Considering the 90-day investment horizon Glatfelter is expected to under-perform the Silgan Holdings. In addition to that, Glatfelter is 2.96 times more volatile than Silgan Holdings. It trades about -0.11 of its total potential returns per unit of risk. Silgan Holdings is currently generating about 0.01 per unit of volatility. If you would invest  5,233  in Silgan Holdings on September 29, 2024 and sell it today you would earn a total of  22.00  from holding Silgan Holdings or generate 0.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	42.86%
Values	Daily Returns

Glatfelter  vs.  Silgan Holdings

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.

Silgan Holdings

Risk-Adjusted Performance

0 of 100

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 Glatfelter and Silgan Holdings

The main advantage of trading using opposite Glatfelter and Silgan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glatfelter 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 Glatfelter 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.