Correlation Between Silgan Holdings and Myers Industries

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

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

Diversification Opportunities for Silgan Holdings and Myers Industries

0.59

Correlation Coefficient

Silgan Holdings  Myers Industries

Very weak diversification

The 1 month correlation between Silgan and Myers is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Silgan Holdings and Myers Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myers Industries and Silgan Holdings 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 Silgan Holdings are associated (or correlated) with Myers Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myers Industries has no effect on the direction of Silgan Holdings i.e., Silgan Holdings and Myers Industries go up and down completely randomly.

Pair Corralation between Silgan Holdings and Myers Industries

Given the investment horizon of 90 days Silgan Holdings is expected to generate 0.8 times more return on investment than Myers Industries. However, Silgan Holdings is 1.25 times less risky than Myers Industries. It trades about 0.02 of its potential returns per unit of risk. Myers Industries is currently generating about 0.01 per unit of risk. If you would invest  4,207  in Silgan Holdings on February 1, 2024 and sell it today you would earn a total of  459.00  from holding Silgan Holdings or generate 10.91% return on investment over 90 days.

Time Period	1 Month [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Silgan Holdings  vs.  Myers Industries

Silgan Holdings

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Silgan Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Myers Industries

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Myers Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Silgan Holdings and Myers Industries

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

The idea behind Silgan Holdings and Myers Industries 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.