Correlation Between CCL Industries and Silgan Holdings

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

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

Diversification Opportunities for CCL Industries and Silgan Holdings

0.74

Correlation Coefficient

CCL Industries  Silgan Holdings

Poor diversification

The 3 months correlation between CCL and Silgan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings 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 Silgan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgan Holdings has no effect on the direction of CCL Industries i.e., CCL Industries and Silgan Holdings go up and down completely randomly.

Pair Corralation between CCL Industries and Silgan Holdings

Assuming the 90 days horizon CCL Industries is expected to generate 0.54 times more return on investment than Silgan Holdings. However, CCL Industries is 1.85 times less risky than Silgan Holdings. It trades about 0.12 of its potential returns per unit of risk. Silgan Holdings is currently generating about -0.06 per unit of risk. If you would invest  5,217  in CCL Industries on May 1, 2025 and sell it today you would earn a total of  495.00  from holding CCL Industries or generate 9.49% return on investment over 90 days.

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

CCL Industries  vs.  Silgan Holdings

CCL Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CCL Industries are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, CCL Industries may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Silgan Holdings

Risk-Adjusted Performance

OK

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 fragile 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.

Pair Trading with CCL Industries and Silgan Holdings

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

The idea behind CCL Industries and Silgan Holdings 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.