Correlation Between Ball Corp and Future Metals
Can any of the company-specific risk be diversified away by investing in both Ball Corp and Future Metals 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 Ball Corp and Future Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ball Corp and Future Metals NL, you can compare the effects of market volatilities on Ball Corp and Future Metals 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 Ball Corp with a short position of Future Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ball Corp and Future Metals.
Diversification Opportunities for Ball Corp and Future Metals
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ball and Future is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ball Corp and Future Metals NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Metals NL and Ball Corp 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 Ball Corp are associated (or correlated) with Future Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Metals NL has no effect on the direction of Ball Corp i.e., Ball Corp and Future Metals go up and down completely randomly.
Pair Corralation between Ball Corp and Future Metals
Assuming the 90 days trading horizon Ball Corp is expected to generate 0.31 times more return on investment than Future Metals. However, Ball Corp is 3.28 times less risky than Future Metals. It trades about 0.04 of its potential returns per unit of risk. Future Metals NL is currently generating about -0.05 per unit of risk. If you would invest 5,219 in Ball Corp on September 14, 2024 and sell it today you would earn a total of 606.00 from holding Ball Corp or generate 11.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.43% |
| Values | Daily Returns |
Ball Corp vs. Future Metals NL
Performance |
| Timeline |
| Ball Corp |
| Future Metals NL |
Ball Corp and Future Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ball Corp and Future Metals
The main advantage of trading using opposite Ball Corp and Future Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ball Corp position performs unexpectedly, Future Metals 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 Future Metals will offset losses from the drop in Future Metals' long position.| Ball Corp vs. Future Metals NL | Ball Corp vs. MoneysupermarketCom Group PLC | Ball Corp vs. Central Asia Metals | Ball Corp vs. Premier Foods PLC |
| Future Metals vs. Givaudan SA | Future Metals vs. Antofagasta PLC | Future Metals vs. Ferrexpo PLC | Future Metals vs. Atalaya Mining |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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