Correlation Between AptarGroup and Greif Bros

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

By analyzing existing cross correlation between AptarGroup and Greif Bros, you can compare the effects of market volatilities on AptarGroup and Greif Bros 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 Greif Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of AptarGroup and Greif Bros.

Diversification Opportunities for AptarGroup and Greif Bros

0.41

Correlation Coefficient

AptarGroup  Greif Bros

Very weak diversification

The 3 months correlation between AptarGroup and Greif is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding AptarGroup and Greif Bros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Bros 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 Greif Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Bros has no effect on the direction of AptarGroup i.e., AptarGroup and Greif Bros go up and down completely randomly.

Pair Corralation between AptarGroup and Greif Bros

Considering the 90-day investment horizon AptarGroup is expected to generate 0.7 times more return on investment than Greif Bros. However, AptarGroup is 1.42 times less risky than Greif Bros. It trades about 0.11 of its potential returns per unit of risk. Greif Bros is currently generating about -0.05 per unit of risk. If you would invest  13,078  in AptarGroup on January 21, 2024 and sell it today you would earn a total of  856.00  from holding AptarGroup or generate 6.55% return on investment over 90 days.

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

AptarGroup  vs.  Greif Bros

AptarGroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, AptarGroup may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Greif Bros

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greif Bros has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Greif Bros is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AptarGroup and Greif Bros

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

The idea behind AptarGroup and Greif Bros 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.