Correlation Between Graphic Packaging and Glatfelter

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

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

Diversification Opportunities for Graphic Packaging and Glatfelter

-0.13

Correlation Coefficient

Graphic Packaging  Glatfelter

Good diversification

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

Pair Corralation between Graphic Packaging and Glatfelter

Considering the 90-day investment horizon Graphic Packaging Holding is expected to generate 0.45 times more return on investment than Glatfelter. However, Graphic Packaging Holding is 2.23 times less risky than Glatfelter. It trades about -0.07 of its potential returns per unit of risk. Glatfelter is currently generating about -0.11 per unit of risk. 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

Graphic Packaging Holding  vs.  Glatfelter

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.

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.

Pair Trading with Graphic Packaging and Glatfelter

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

The idea behind Graphic Packaging Holding and Glatfelter 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.