Correlation Between Ardagh Metal and Graphic Packaging
Can any of the company-specific risk be diversified away by investing in both Ardagh Metal and Graphic Packaging 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 Graphic Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardagh Metal Packaging and Graphic Packaging Holding, you can compare the effects of market volatilities on Ardagh Metal and Graphic Packaging 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 Graphic Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardagh Metal and Graphic Packaging.
Diversification Opportunities for Ardagh Metal and Graphic Packaging
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ardagh and Graphic is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ardagh Metal Packaging and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding 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 Packaging are associated (or correlated) with Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of Ardagh Metal i.e., Ardagh Metal and Graphic Packaging go up and down completely randomly.
Pair Corralation between Ardagh Metal and Graphic Packaging
Given the investment horizon of 90 days Ardagh Metal is expected to generate 1.58 times less return on investment than Graphic Packaging. In addition to that, Ardagh Metal is 1.32 times more volatile than Graphic Packaging Holding. It trades about 0.04 of its total potential returns per unit of risk. Graphic Packaging Holding is currently generating about 0.09 per unit of volatility. If you would invest 2,057 in Graphic Packaging Holding on August 25, 2024 and sell it today you would earn a total of 871.00 from holding Graphic Packaging Holding or generate 42.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ardagh Metal Packaging vs. Graphic Packaging Holding
Performance |
| Timeline |
| Ardagh Metal Packaging |
| Graphic Packaging Holding |
Ardagh Metal and Graphic Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardagh Metal and Graphic Packaging
The main advantage of trading using opposite Ardagh Metal and Graphic Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardagh Metal position performs unexpectedly, Graphic Packaging 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 Graphic Packaging will offset losses from the drop in Graphic Packaging's long position.| Ardagh Metal vs. Crown Holdings | Ardagh Metal vs. Amcor PLC | Ardagh Metal vs. Avery Dennison Corp | Ardagh Metal vs. Packaging Corp of |
| Graphic Packaging vs. Ball Corporation | Graphic Packaging vs. Silgan Holdings | Graphic Packaging vs. Sonoco Products | Graphic Packaging vs. Reynolds Consumer Products |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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