Correlation Between HEICO and Greif

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

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

Diversification Opportunities for HEICO and Greif

0.82

Correlation Coefficient

HEICO  Greif

Very poor diversification

The 3 months correlation between HEICO and Greif is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding HEICO and Greif Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greif Inc and HEICO 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 HEICO are associated (or correlated) with Greif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greif Inc has no effect on the direction of HEICO i.e., HEICO and Greif go up and down completely randomly.

Pair Corralation between HEICO and Greif

Assuming the 90 days horizon HEICO is expected to generate 0.66 times more return on investment than Greif. However, HEICO is 1.52 times less risky than Greif. It trades about 0.21 of its potential returns per unit of risk. Greif Inc is currently generating about 0.09 per unit of risk. If you would invest  21,133  in HEICO on May 4, 2025 and sell it today you would earn a total of  4,595  from holding HEICO or generate 21.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

HEICO  vs.  Greif Inc

HEICO

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HEICO are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HEICO sustained solid returns over the last few months and may actually be approaching a breakup point.

Greif Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Greif Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Greif sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEICO and Greif

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

The idea behind HEICO and Greif Inc 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.