Correlation Between Silgan Holdings and NEXE Innovations

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

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

Diversification Opportunities for Silgan Holdings and NEXE Innovations

0.5

Correlation Coefficient

Silgan Holdings  NEXE Innovations

Very weak diversification

The 3 months correlation between Silgan and NEXE is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and NEXE Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXE Innovations and Silgan Holdings 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 Silgan Holdings are associated (or correlated) with NEXE Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXE Innovations has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and NEXE Innovations go up and down completely randomly.

Pair Corralation between Silgan Holdings and NEXE Innovations

Given the investment horizon of 90 days Silgan Holdings is expected to generate 4.58 times less return on investment than NEXE Innovations. But when comparing it to its historical volatility, Silgan Holdings is 4.52 times less risky than NEXE Innovations. It trades about 0.11 of its potential returns per unit of risk. NEXE Innovations is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  24.00  in NEXE Innovations on September 14, 2024 and sell it today you would earn a total of  7.00  from holding NEXE Innovations or generate 29.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Silgan Holdings  vs.  NEXE Innovations

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 conflicting technical and fundamental indicators, Silgan Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NEXE Innovations

Risk-Adjusted Performance

8 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NEXE Innovations are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, NEXE Innovations reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silgan Holdings and NEXE Innovations

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

The idea behind Silgan Holdings and NEXE Innovations 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..