Correlation Between ARDAGH METAL and Prosus NV
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Prosus NV 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 Prosus NV 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 Prosus NV, you can compare the effects of market volatilities on ARDAGH METAL and Prosus NV 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 Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Prosus NV.
Diversification Opportunities for ARDAGH METAL and Prosus NV
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ARDAGH and Prosus is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV 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 Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Prosus NV go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Prosus NV
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to generate 1.39 times more return on investment than Prosus NV. However, ARDAGH METAL is 1.39 times more volatile than Prosus NV. It trades about -0.1 of its potential returns per unit of risk. Prosus NV is currently generating about -0.21 per unit of risk. If you would invest 284.00 in ARDAGH METAL PACDL 0001 on October 25, 2024 and sell it today you would lose (22.00) from holding ARDAGH METAL PACDL 0001 or give up 7.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Prosus NV
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Prosus NV |
ARDAGH METAL and Prosus NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Prosus NV
The main advantage of trading using opposite ARDAGH METAL and Prosus NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Prosus NV 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 Prosus NV will offset losses from the drop in Prosus NV's long position.| ARDAGH METAL vs. ELL ENVIRONHLDGS HD 0001 | ARDAGH METAL vs. GRUPO CARSO A1 | ARDAGH METAL vs. INTER CARS SA | ARDAGH METAL vs. CarsalesCom |
| Prosus NV vs. Dalata Hotel Group | Prosus NV vs. RELIANCE STEEL AL | Prosus NV vs. COSMOSTEEL HLDGS | Prosus NV vs. Khiron Life Sciences |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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