Correlation Between Graphic Packaging and Victory Bancorp

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Can any of the company-specific risk be diversified away by investing in both Graphic Packaging and Victory Bancorp 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 Graphic Packaging and Victory Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphic Packaging Holding and The Victory Bancorp, you can compare the effects of market volatilities on Graphic Packaging and Victory Bancorp 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 Graphic Packaging with a short position of Victory Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphic Packaging and Victory Bancorp.

Diversification Opportunities for Graphic Packaging and Victory Bancorp

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Graphic and Victory is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Graphic Packaging Holding and The Victory Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Bancorp and Graphic Packaging 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 Graphic Packaging Holding are associated (or correlated) with Victory Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Bancorp has no effect on the direction of Graphic Packaging i.e., Graphic Packaging and Victory Bancorp go up and down completely randomly.

Pair Corralation between Graphic Packaging and Victory Bancorp

Considering the 90-day investment horizon Graphic Packaging Holding is expected to generate 1.3 times more return on investment than Victory Bancorp. However, Graphic Packaging is 1.3 times more volatile than The Victory Bancorp. It trades about 0.39 of its potential returns per unit of risk. The Victory Bancorp is currently generating about -0.27 per unit of risk. If you would invest  2,597  in Graphic Packaging Holding on December 29, 2023 and sell it today you would earn a total of  321.00  from holding Graphic Packaging Holding or generate 12.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.65%
ValuesDaily Returns

Graphic Packaging Holding  vs.  The Victory Bancorp

 Performance 
       Timeline  
Graphic Packaging Holding 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Graphic Packaging Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Graphic Packaging disclosed solid returns over the last few months and may actually be approaching a breakup point.
Victory Bancorp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days The Victory Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Victory Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Graphic Packaging and Victory Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Graphic Packaging and Victory Bancorp

The main advantage of trading using opposite Graphic Packaging and Victory Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphic Packaging position performs unexpectedly, Victory Bancorp 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 Victory Bancorp will offset losses from the drop in Victory Bancorp's long position.
The idea behind Graphic Packaging Holding and The Victory Bancorp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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