Correlation Between Advanced Container and Sonoco Products
Can any of the company-specific risk be diversified away by investing in both Advanced Container and Sonoco Products 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 Advanced Container and Sonoco Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Container Technologies and Sonoco Products, you can compare the effects of market volatilities on Advanced Container and Sonoco Products 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 Advanced Container with a short position of Sonoco Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Container and Sonoco Products.
Diversification Opportunities for Advanced Container and Sonoco Products
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advanced and Sonoco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Container Technologie and Sonoco Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoco Products and Advanced Container 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 Advanced Container Technologies are associated (or correlated) with Sonoco Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonoco Products has no effect on the direction of Advanced Container i.e., Advanced Container and Sonoco Products go up and down completely randomly.
Pair Corralation between Advanced Container and Sonoco Products
If you would invest 5,194 in Sonoco Products on August 31, 2024 and sell it today you would lose (3.00) from holding Sonoco Products or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Advanced Container Technologie vs. Sonoco Products
Performance |
| Timeline |
| Advanced Container |
| Sonoco Products |
Advanced Container and Sonoco Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Container and Sonoco Products
The main advantage of trading using opposite Advanced Container and Sonoco Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Container position performs unexpectedly, Sonoco Products 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 Sonoco Products will offset losses from the drop in Sonoco Products' long position.| Advanced Container vs. Sonoco Products | Advanced Container vs. Avery Dennison Corp | Advanced Container vs. Ardagh Metal Packaging | Advanced Container vs. Ball Corporation |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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