Correlation Between AVITA Medical and Graphic Packaging
Can any of the company-specific risk be diversified away by investing in both AVITA Medical and Graphic Packaging 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 AVITA Medical and Graphic Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVITA Medical and Graphic Packaging Holding, you can compare the effects of market volatilities on AVITA Medical and Graphic Packaging 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 AVITA Medical with a short position of Graphic Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and Graphic Packaging.
Diversification Opportunities for AVITA Medical and Graphic Packaging
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AVITA and Graphic is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding and AVITA Medical 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 AVITA Medical are associated (or correlated) with Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of AVITA Medical i.e., AVITA Medical and Graphic Packaging go up and down completely randomly.
Pair Corralation between AVITA Medical and Graphic Packaging
Assuming the 90 days trading horizon AVITA Medical is expected to generate 3.09 times more return on investment than Graphic Packaging. However, AVITA Medical is 3.09 times more volatile than Graphic Packaging Holding. It trades about 0.2 of its potential returns per unit of risk. Graphic Packaging Holding is currently generating about 0.06 per unit of risk. If you would invest 212.00 in AVITA Medical on September 12, 2024 and sell it today you would earn a total of 32.00 from holding AVITA Medical or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVITA Medical vs. Graphic Packaging Holding
Performance |
| Timeline |
| AVITA Medical |
| Graphic Packaging Holding |
AVITA Medical and Graphic Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVITA Medical and Graphic Packaging
The main advantage of trading using opposite AVITA Medical and Graphic Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical position performs unexpectedly, Graphic Packaging 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 Graphic Packaging will offset losses from the drop in Graphic Packaging's long position.| AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc |
| Graphic Packaging vs. Packaging of | Graphic Packaging vs. Superior Plus Corp | Graphic Packaging vs. SIVERS SEMICONDUCTORS AB | Graphic Packaging vs. Norsk Hydro ASA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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