Correlation Between ARDAGH METAL and PPL
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and PPL 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 PPL 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 PPL Corporation, you can compare the effects of market volatilities on ARDAGH METAL and PPL 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 PPL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and PPL.
Diversification Opportunities for ARDAGH METAL and PPL
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ARDAGH and PPL is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and PPL Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPL Corporation 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 PPL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPL Corporation has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and PPL go up and down completely randomly.
Pair Corralation between ARDAGH METAL and PPL
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to generate 3.18 times more return on investment than PPL. However, ARDAGH METAL is 3.18 times more volatile than PPL Corporation. It trades about 0.03 of its potential returns per unit of risk. PPL Corporation is currently generating about 0.05 per unit of risk. If you would invest 322.00 in ARDAGH METAL PACDL 0001 on August 27, 2024 and sell it today you would earn a total of 42.00 from holding ARDAGH METAL PACDL 0001 or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. PPL Corp.
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| PPL Corporation |
ARDAGH METAL and PPL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and PPL
The main advantage of trading using opposite ARDAGH METAL and PPL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, PPL 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 PPL will offset losses from the drop in PPL's long position.| ARDAGH METAL vs. AptarGroup | ARDAGH METAL vs. Superior Plus Corp | ARDAGH METAL vs. NMI Holdings | ARDAGH METAL vs. Origin Agritech |
| PPL vs. CITY OFFICE REIT | PPL vs. Kaiser Aluminum | PPL vs. Meiko Electronics Co | PPL vs. ARDAGH METAL PACDL 0001 |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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