Correlation Between ARDAGH METAL and Alfen NV
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Alfen 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 Alfen 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 Alfen NV, you can compare the effects of market volatilities on ARDAGH METAL and Alfen 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 Alfen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Alfen NV.
Diversification Opportunities for ARDAGH METAL and Alfen NV
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ARDAGH and Alfen is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen 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 Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Alfen NV go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Alfen NV
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Alfen NV. In addition to that, ARDAGH METAL is 1.06 times more volatile than Alfen NV. It trades about -0.11 of its total potential returns per unit of risk. Alfen NV is currently generating about 0.1 per unit of volatility. If you would invest 1,335 in Alfen NV on November 7, 2024 and sell it today you would earn a total of 87.00 from holding Alfen NV or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Alfen NV
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Alfen NV |
ARDAGH METAL and Alfen NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Alfen NV
The main advantage of trading using opposite ARDAGH METAL and Alfen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Alfen 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 Alfen NV will offset losses from the drop in Alfen NV's long position.| ARDAGH METAL vs. Merit Medical Systems | ARDAGH METAL vs. Regal Hotels International | ARDAGH METAL vs. UNIVMUSIC GRPADR050 | ARDAGH METAL vs. Genertec Universal Medical |
| Alfen NV vs. DATATEC LTD 2 | Alfen NV vs. DATADOT TECHNOLOGY | Alfen NV vs. Agilent Technologies | Alfen NV vs. Alliance Data Systems |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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