Correlation Between AptarGroup and International Paper
Can any of the company-specific risk be diversified away by investing in both AptarGroup and International Paper 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 AptarGroup and International Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AptarGroup and International Paper, you can compare the effects of market volatilities on AptarGroup and International Paper 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 AptarGroup with a short position of International Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptarGroup and International Paper.
Diversification Opportunities for AptarGroup and International Paper
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AptarGroup and International is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and International Paper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Paper and AptarGroup 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 AptarGroup are associated (or correlated) with International Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Paper has no effect on the direction of AptarGroup i.e., AptarGroup and International Paper go up and down completely randomly.
Pair Corralation between AptarGroup and International Paper
Considering the 90-day investment horizon AptarGroup is expected to generate 0.75 times more return on investment than International Paper. However, AptarGroup is 1.34 times less risky than International Paper. It trades about -0.03 of its potential returns per unit of risk. International Paper is currently generating about -0.69 per unit of risk. If you would invest 14,424 in AptarGroup on January 27, 2024 and sell it today you would lose (90.00) from holding AptarGroup or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AptarGroup vs. International Paper
Performance |
| Timeline |
| AptarGroup |
| International Paper |
AptarGroup and International Paper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AptarGroup and International Paper
The main advantage of trading using opposite AptarGroup and International Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AptarGroup position performs unexpectedly, International Paper 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 International Paper will offset losses from the drop in International Paper's long position.| AptarGroup vs. Haemonetics | AptarGroup vs. Merit Medical Systems | AptarGroup vs. AngioDynamics | AptarGroup vs. Envista Holdings Corp |
| International Paper vs. WestRock Co | International Paper vs. Sealed Air | International Paper vs. Sonoco Products | International Paper vs. Ball Corporation |
Check out your portfolio center.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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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