Correlation Between ARDAGH METAL and CN MODERN
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and CN MODERN 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 ARDAGH METAL and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and CN MODERN DAIRY, you can compare the effects of market volatilities on ARDAGH METAL and CN MODERN 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 ARDAGH METAL with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and CN MODERN.
Diversification Opportunities for ARDAGH METAL and CN MODERN
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ARDAGH and 07M is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 are associated (or correlated) with CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and CN MODERN go up and down completely randomly.
Pair Corralation between ARDAGH METAL and CN MODERN
Assuming the 90 days horizon ARDAGH METAL is expected to generate 1.87 times less return on investment than CN MODERN. In addition to that, ARDAGH METAL is 1.18 times more volatile than CN MODERN DAIRY. It trades about 0.03 of its total potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.07 per unit of volatility. If you would invest 6.56 in CN MODERN DAIRY on August 29, 2024 and sell it today you would earn a total of 2.59 from holding CN MODERN DAIRY or generate 39.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. CN MODERN DAIRY
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| CN MODERN DAIRY |
ARDAGH METAL and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and CN MODERN
The main advantage of trading using opposite ARDAGH METAL and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| ARDAGH METAL vs. FANDIFI TECHNOLOGY P | ARDAGH METAL vs. WILLIS LEASE FIN | ARDAGH METAL vs. Cars Inc | ARDAGH METAL vs. COMMERCIAL VEHICLE |
| CN MODERN vs. Apple Inc | CN MODERN vs. Apple Inc | CN MODERN vs. Superior Plus Corp | CN MODERN vs. SIVERS SEMICONDUCTORS AB |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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