Correlation Between ARDAGH METAL and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on ARDAGH METAL and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and BRIT AMER.
Diversification Opportunities for ARDAGH METAL and BRIT AMER
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARDAGH and BRIT is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and BRIT AMER go up and down completely randomly.
Pair Corralation between ARDAGH METAL and BRIT AMER
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to generate 3.32 times more return on investment than BRIT AMER. However, ARDAGH METAL is 3.32 times more volatile than BRIT AMER TOBACCO. It trades about 0.02 of its potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.02 per unit of risk. If you would invest 340.00 in ARDAGH METAL PACDL 0001 on September 3, 2024 and sell it today you would earn a total of 0.00 from holding ARDAGH METAL PACDL 0001 or generate 0.0% 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. BRIT AMER TOBACCO
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| BRIT AMER TOBACCO |
ARDAGH METAL and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and BRIT AMER
The main advantage of trading using opposite ARDAGH METAL and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| ARDAGH METAL vs. AptarGroup | ARDAGH METAL vs. Superior Plus Corp | ARDAGH METAL vs. NMI Holdings | ARDAGH METAL vs. Origin Agritech |
| BRIT AMER vs. FEMALE HEALTH | BRIT AMER vs. PARKEN Sport Entertainment | BRIT AMER vs. Amkor Technology | BRIT AMER vs. CVS Health |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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