Correlation Between ARDAGH METAL and Gentex
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Gentex 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 Gentex 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 Gentex, you can compare the effects of market volatilities on ARDAGH METAL and Gentex 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 Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Gentex.
Diversification Opportunities for ARDAGH METAL and Gentex
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ARDAGH and Gentex is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Gentex go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Gentex
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Gentex. In addition to that, ARDAGH METAL is 1.41 times more volatile than Gentex. It trades about -0.11 of its total potential returns per unit of risk. Gentex is currently generating about -0.02 per unit of volatility. If you would invest 2,708 in Gentex on November 7, 2024 and sell it today you would lose (48.00) from holding Gentex or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Gentex
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Gentex |
ARDAGH METAL and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Gentex
The main advantage of trading using opposite ARDAGH METAL and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex'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 |
| Gentex vs. Keck Seng Investments | Gentex vs. Hitachi Construction Machinery | Gentex vs. Dairy Farm International | Gentex vs. North American Construction |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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