Correlation Between TriMas and Silgan Holdings

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

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

Diversification Opportunities for TriMas and Silgan Holdings

0.15

Correlation Coefficient

TriMas  Silgan Holdings

Average diversification

The 3 months correlation between TriMas and Silgan is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding TriMas and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings and TriMas 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 TriMas 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 TriMas i.e., TriMas and Silgan Holdings go up and down completely randomly.

Pair Corralation between TriMas and Silgan Holdings

Considering the 90-day investment horizon TriMas is expected to under-perform the Silgan Holdings. In addition to that, TriMas is 1.78 times more volatile than Silgan Holdings. It trades about -0.02 of its total potential returns per unit of risk. Silgan Holdings is currently generating about 0.02 per unit of volatility. If you would invest  5,233  in Silgan Holdings on September 28, 2024 and sell it today you would earn a total of  54.00  from holding Silgan Holdings or generate 1.03% return on investment over 90 days.

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

TriMas  vs.  Silgan Holdings

TriMas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TriMas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TriMas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Silgan Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silgan Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 TriMas and Silgan Holdings

The main advantage of trading using opposite TriMas and Silgan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TriMas 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 TriMas 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.