Correlation Between Amcor Plc and INFORMATION SVC

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

Diversification Opportunities for Amcor Plc and INFORMATION SVC

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Amcor and INFORMATION is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Amcor plc and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP and Amcor Plc 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 Amcor plc are associated (or correlated) with INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of Amcor Plc i.e., Amcor Plc and INFORMATION SVC go up and down completely randomly.

Pair Corralation between Amcor Plc and INFORMATION SVC

Assuming the 90 days horizon Amcor Plc is expected to generate 8.53 times less return on investment than INFORMATION SVC. In addition to that, Amcor Plc is 1.31 times more volatile than INFORMATION SVC GRP. It trades about 0.03 of its total potential returns per unit of risk. INFORMATION SVC GRP is currently generating about 0.33 per unit of volatility. If you would invest  310.00  in INFORMATION SVC GRP on September 14, 2024 and sell it today you would earn a total of  46.00  from holding INFORMATION SVC GRP or generate 14.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Amcor plc  vs.  INFORMATION SVC GRP

 Performance 
       Timeline  
Amcor plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Amcor plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amcor Plc is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
INFORMATION SVC GRP 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in INFORMATION SVC GRP are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, INFORMATION SVC reported solid returns over the last few months and may actually be approaching a breakup point.

Amcor Plc and INFORMATION SVC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amcor Plc and INFORMATION SVC

The main advantage of trading using opposite Amcor Plc and INFORMATION SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor Plc position performs unexpectedly, INFORMATION SVC 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 INFORMATION SVC will offset losses from the drop in INFORMATION SVC's long position.
The idea behind Amcor plc and INFORMATION SVC GRP 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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