Correlation Between ROHM Co and Graphic Packaging

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

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

Diversification Opportunities for ROHM Co and Graphic Packaging

-0.78

Correlation Coefficient

ROHM Co  Graphic Packaging

Pay attention - limited upside

The 3 months correlation between ROHM and Graphic is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ROHM Co 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 ROHM Co 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 ROHM Co 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 ROHM Co i.e., ROHM Co and Graphic Packaging go up and down completely randomly.

Pair Corralation between ROHM Co and Graphic Packaging

Assuming the 90 days horizon ROHM Co is expected to generate 1.03 times more return on investment than Graphic Packaging. However, ROHM Co is 1.03 times more volatile than Graphic Packaging Holding. It trades about 0.25 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  756.00  in ROHM Co on April 24, 2025 and sell it today you would earn a total of  316.00  from holding ROHM Co or generate 41.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

ROHM Co  vs.  Graphic Packaging Holding

ROHM Co

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ROHM Co are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ROHM Co 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 ROHM Co and Graphic Packaging

The main advantage of trading using opposite ROHM Co and Graphic Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROHM Co 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 ROHM Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.