Correlation Between ARDAGH METAL and Packaging
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Packaging 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 Packaging 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 Packaging of, you can compare the effects of market volatilities on ARDAGH METAL and Packaging 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 Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Packaging.
Diversification Opportunities for ARDAGH METAL and Packaging
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ARDAGH and Packaging is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packaging 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 Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packaging has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Packaging go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Packaging
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Packaging. In addition to that, ARDAGH METAL is 4.18 times more volatile than Packaging of. It trades about -0.06 of its total potential returns per unit of risk. Packaging of is currently generating about 0.03 per unit of volatility. If you would invest 22,470 in Packaging of on September 13, 2024 and sell it today you would earn a total of 110.00 from holding Packaging of or generate 0.49% 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. Packaging of
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Packaging |
ARDAGH METAL and Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Packaging
The main advantage of trading using opposite ARDAGH METAL and Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Packaging 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 Packaging will offset losses from the drop in Packaging's long position.| ARDAGH METAL vs. Packaging of | ARDAGH METAL vs. Graphic Packaging Holding | ARDAGH METAL vs. Superior Plus Corp | ARDAGH METAL vs. SIVERS SEMICONDUCTORS AB |
| Packaging vs. Graphic Packaging Holding | Packaging vs. Superior Plus Corp | Packaging vs. SIVERS SEMICONDUCTORS AB | Packaging vs. Norsk Hydro ASA |
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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