Correlation Between Albany International and Avery Dennison
Can any of the company-specific risk be diversified away by investing in both Albany International and Avery Dennison 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 Albany International and Avery Dennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albany International and Avery Dennison Corp, you can compare the effects of market volatilities on Albany International and Avery Dennison 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 Albany International with a short position of Avery Dennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albany International and Avery Dennison.
Diversification Opportunities for Albany International and Avery Dennison
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albany and Avery is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Albany International and Avery Dennison Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avery Dennison Corp and Albany International 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 Albany International are associated (or correlated) with Avery Dennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avery Dennison Corp has no effect on the direction of Albany International i.e., Albany International and Avery Dennison go up and down completely randomly.
Pair Corralation between Albany International and Avery Dennison
Considering the 90-day investment horizon Albany International is expected to under-perform the Avery Dennison. In addition to that, Albany International is 1.47 times more volatile than Avery Dennison Corp. It trades about -0.02 of its total potential returns per unit of risk. Avery Dennison Corp is currently generating about 0.02 per unit of volatility. If you would invest 17,951 in Avery Dennison Corp on October 20, 2024 and sell it today you would earn a total of 1,181 from holding Avery Dennison Corp or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albany International vs. Avery Dennison Corp
Performance |
| Timeline |
| Albany International |
| Avery Dennison Corp |
Albany International and Avery Dennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albany International and Avery Dennison
The main advantage of trading using opposite Albany International and Avery Dennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albany International position performs unexpectedly, Avery Dennison 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 Avery Dennison will offset losses from the drop in Avery Dennison's long position.| Albany International vs. Culp Inc | Albany International vs. Unifi Inc | Albany International vs. Toray Industries |
| Avery Dennison vs. Packaging Corp of | Avery Dennison vs. O I Glass | Avery Dennison vs. Silgan Holdings | Avery Dennison vs. Sealed Air |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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