Correlation Between ARDAGH METAL and Sony Group
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL and Sony Group 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 Sony Group 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 Sony Group, you can compare the effects of market volatilities on ARDAGH METAL and Sony Group 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 Sony Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Sony Group.
Diversification Opportunities for ARDAGH METAL and Sony Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ARDAGH and Sony is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group 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 Sony Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and Sony Group go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Sony Group
Assuming the 90 days horizon ARDAGH METAL is expected to generate 2.87 times less return on investment than Sony Group. In addition to that, ARDAGH METAL is 1.22 times more volatile than Sony Group. It trades about 0.02 of its total potential returns per unit of risk. Sony Group is currently generating about 0.07 per unit of volatility. If you would invest 1,520 in Sony Group on August 31, 2024 and sell it today you would earn a total of 290.00 from holding Sony Group or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Sony Group
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Sony Group |
ARDAGH METAL and Sony Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Sony Group
The main advantage of trading using opposite ARDAGH METAL and Sony Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL position performs unexpectedly, Sony Group 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 Sony Group will offset losses from the drop in Sony Group's long position.| ARDAGH METAL vs. KAUFMAN ET BROAD | ARDAGH METAL vs. GRIFFIN MINING LTD | ARDAGH METAL vs. Nishi Nippon Railroad Co | ARDAGH METAL vs. EVS Broadcast Equipment |
| Sony Group vs. Apple Inc | Sony Group vs. Apple Inc | Sony Group vs. Samsung Electronics Co | Sony Group vs. Samsung Electronics Co |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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