Correlation Between ARDAGH METAL and LION ONE
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and LION ONE 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 LION ONE 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 LION ONE METALS, you can compare the effects of market volatilities on ARDAGH METAL and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and LION ONE.
Diversification Opportunities for ARDAGH METAL and LION ONE
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ARDAGH and LION is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and LION ONE go up and down completely randomly.
Pair Corralation between ARDAGH METAL and LION ONE
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to generate 0.72 times more return on investment than LION ONE. However, ARDAGH METAL PACDL 0001 is 1.4 times less risky than LION ONE. It trades about 0.03 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.07 per unit of risk. If you would invest 304.00 in ARDAGH METAL PACDL 0001 on August 25, 2024 and sell it today you would earn a total of 36.00 from holding ARDAGH METAL PACDL 0001 or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. LION ONE METALS
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| LION ONE METALS |
ARDAGH METAL and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and LION ONE
The main advantage of trading using opposite ARDAGH METAL and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| ARDAGH METAL vs. AptarGroup | ARDAGH METAL vs. Superior Plus Corp | ARDAGH METAL vs. NMI Holdings | ARDAGH METAL vs. Origin Agritech |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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