Correlation Between CCL Industries and Graphic Packaging

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

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

Diversification Opportunities for CCL Industries and Graphic Packaging

-0.63

Correlation Coefficient

CCL Industries  Graphic Packaging

Excellent diversification

The 3 months correlation between CCL and Graphic is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding and CCL Industries 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 CCL Industries are associated (or correlated) with Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of CCL Industries i.e., CCL Industries and Graphic Packaging go up and down completely randomly.

Pair Corralation between CCL Industries and Graphic Packaging

Assuming the 90 days horizon CCL Industries is expected to generate 0.54 times more return on investment than Graphic Packaging. However, CCL Industries is 1.86 times less risky than Graphic Packaging. It trades about 0.17 of its potential returns per unit of risk. Graphic Packaging Holding is currently generating about -0.07 per unit of risk. If you would invest  4,322  in CCL Industries on April 24, 2025 and sell it today you would earn a total of  598.00  from holding CCL Industries or generate 13.84% return on investment over 90 days.

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

CCL Industries  vs.  Graphic Packaging Holding

CCL Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CCL Industries are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CCL Industries reported solid returns over the last few months and may actually be approaching a breakup point.

Graphic Packaging Holding

Risk-Adjusted Performance

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 stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CCL Industries and Graphic Packaging

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

The idea behind CCL Industries and Graphic Packaging Holding 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..