Correlation Between Aristocrat Leisure and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and ARDAGH METAL 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 Aristocrat Leisure and ARDAGH METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on Aristocrat Leisure and ARDAGH METAL 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 Aristocrat Leisure with a short position of ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and ARDAGH METAL.
Diversification Opportunities for Aristocrat Leisure and ARDAGH METAL
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aristocrat and ARDAGH is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL and Aristocrat Leisure 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 Aristocrat Leisure Limited are associated (or correlated) with ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and ARDAGH METAL go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and ARDAGH METAL
Assuming the 90 days horizon Aristocrat Leisure Limited is expected to generate 0.51 times more return on investment than ARDAGH METAL. However, Aristocrat Leisure Limited is 1.97 times less risky than ARDAGH METAL. It trades about 0.15 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about -0.01 per unit of risk. If you would invest 3,168 in Aristocrat Leisure Limited on October 18, 2024 and sell it today you would earn a total of 1,072 from holding Aristocrat Leisure Limited or generate 33.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| Aristocrat Leisure |
| ARDAGH METAL PACDL |
Aristocrat Leisure and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and ARDAGH METAL
The main advantage of trading using opposite Aristocrat Leisure and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| Aristocrat Leisure vs. X FAB Silicon Foundries | Aristocrat Leisure vs. Peijia Medical Limited | Aristocrat Leisure vs. SPECTRAL MEDICAL | Aristocrat Leisure vs. Merit Medical Systems |
| ARDAGH METAL vs. PLAY2CHILL SA ZY | ARDAGH METAL vs. Aristocrat Leisure Limited | ARDAGH METAL vs. SEALED AIR | ARDAGH METAL vs. Columbia Sportswear |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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