Correlation Between ARDAGH METAL and Focus Home
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Focus Home 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 Focus Home 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 Focus Home Interactive, you can compare the effects of market volatilities on ARDAGH METAL and Focus Home 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 Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Focus Home.
Diversification Opportunities for ARDAGH METAL and Focus Home
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ARDAGH and Focus is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive 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 Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Focus Home go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Focus Home
Assuming the 90 days horizon ARDAGH METAL is expected to generate 45.92 times less return on investment than Focus Home. But when comparing it to its historical volatility, ARDAGH METAL PACDL 0001 is 1.89 times less risky than Focus Home. It trades about 0.0 of its potential returns per unit of risk. Focus Home Interactive is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 798.00 in Focus Home Interactive on October 12, 2024 and sell it today you would earn a total of 1,422 from holding Focus Home Interactive or generate 178.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Focus Home Interactive
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Focus Home Interactive |
ARDAGH METAL and Focus Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Focus Home
The main advantage of trading using opposite ARDAGH METAL and Focus Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Focus Home 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 Focus Home will offset losses from the drop in Focus Home's long position.| ARDAGH METAL vs. Harmony Gold Mining | ARDAGH METAL vs. Cal Maine Foods | ARDAGH METAL vs. SENECA FOODS A | ARDAGH METAL vs. Eurasia Mining Plc |
| Focus Home vs. AWILCO DRILLING PLC | Focus Home vs. BORR DRILLING NEW | Focus Home vs. Neinor Homes SA | Focus Home vs. American Homes 4 |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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