Correlation Between Amcor Plc and CeoTronics
Can any of the company-specific risk be diversified away by investing in both Amcor Plc and CeoTronics 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 CeoTronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcor plc and CeoTronics AG, you can compare the effects of market volatilities on Amcor Plc and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor Plc and CeoTronics.
Diversification Opportunities for Amcor Plc and CeoTronics
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amcor and CeoTronics is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Amcor plc and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of Amcor Plc i.e., Amcor Plc and CeoTronics go up and down completely randomly.
Pair Corralation between Amcor Plc and CeoTronics
Assuming the 90 days trading horizon Amcor Plc is expected to generate 2.36 times less return on investment than CeoTronics. But when comparing it to its historical volatility, Amcor plc is 1.02 times less risky than CeoTronics. It trades about 0.04 of its potential returns per unit of risk. CeoTronics AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 330.00 in CeoTronics AG on September 12, 2024 and sell it today you would earn a total of 335.00 from holding CeoTronics AG or generate 101.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amcor plc vs. CeoTronics AG
Performance |
| Timeline |
| Amcor plc |
| CeoTronics AG |
Amcor Plc and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcor Plc and CeoTronics
The main advantage of trading using opposite Amcor Plc and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor Plc position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| Amcor Plc vs. CeoTronics AG | Amcor Plc vs. SLR Investment Corp | Amcor Plc vs. Postal Savings Bank | Amcor Plc vs. Apollo Investment Corp |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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